SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------------------
FORM 10-K
(mark one)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended March 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-12636
THERMO REMEDIATION INC.
(Exact name of Registrant as specified in its charter)
Delaware 59-3203761
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1964 South Orange Blossom Trail
Apopka, Florida 32703
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
---------------------------- -----------------------------------------
Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference into Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of May 24, 1996, was approximately $58,018,000.
As of May 24, 1996, the Registrant had 12,849,592 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Fiscal 1996 Annual Report to Shareholders for
the year ended March 30, 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 September 25, 1996, are incorporated
by reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business.
Thermo Remediation Inc. (the Company or the Registrant) is a leading
national provider of contaminated soil-remediation services, industrial-
remediation services, nuclear-remediation services, and waste-fluids
recycling services.
The Company is a national leader in the design and operation of
nonhazardous soil-remediation facilities and operates a network of such
facilities serving customers in more than a dozen states along the East and
West Coasts. The Company thermally treats soil to remove and destroy
hydrocarbon contamination caused by leaking underground storage tanks,
aboveground storage tanks, spills accumulated at manufactured-gas plants
and refineries and other sources.
In December 1995, the Company acquired Remediation Technologies, Inc.
(ReTec), a provider of consulting, engineering, and on-site services to
help clients manage problems associated with environmental compliance,
waste management, and the remediation of industrial sites contaminated with
organic wastes and residues. The purchase price of $29.7 million consisted
of $18.5 million in cash, shares of the Company's common stock and warrants
valued at $3.7 million, and approximately $7.5 million attributable to the
conversion of outstanding ReTec stock options into Company stock options of
equivalent intrinsic value at the date of acquisition.
In June 1995, the Company acquired Thermo Nutech (formerly the Nuclear
Services Group) from its parent company, Thermo TerraTech Inc. (Thermo
TerraTech, formerly Thermo Process Systems Inc.), in exchange for 1,583,360
shares of the Company's common stock, with a fair market value of $24.7
million as of such date. Thermo Nutech provides services to remove
radioactive contaminants from sand, gravel, and soil, as well as health
physics services, radiochemistry laboratory services, radiation dosimetry
services, radiation instrument calibration and repair services, and
radiation-source production.
The Company's Thermo Fluids subsidiary collects, tests, processes, and
recycles used motor oil and other industrial oils. In addition, Thermo
Fluids collects and recycles oily water, antifreeze, and oil filters.
The Company was incorporated in November 1991 as an indirect, wholly
owned subsidiary of Thermo TerraTech, to operate a soil-remediation center
in Adelanto, California. On October 1, 1993, pursuant to a reorganization
involving Thermo TerraTech and four of its indirect, wholly, or partially
owned subsidiaries, the Company became the parent corporation and sole
shareholder of such other subsidiaries, and Thermo TerraTech contributed to
the Company certain assets and liabilities pertaining to its
soil-remediation business. As of March 30, 1996, Thermo TerraTech owned
8,427,657 shares of the common stock of the Company, representing 66% of
such stock then outstanding. Thermo TerraTech intends, for the foreseeable
future, to maintain at least 50% ownership of the Company. A publicly
traded subsidiary of Thermo Electron Corporation (Thermo Electron), Thermo
2PAGE
TerraTech provides a range of specialized environmental services including
engineering design and construction management of water supply and
wastewater treatment systems for both industry and municipalities, as well
as remediation of contaminated soils and fluids, reclamation of waste
industrial fluids, nuclear-remediation and safety, and consulting and
environmental management services rendered by the Company. Thermo TerraTech
also provides environmental science, laboratory-based testing, and
metal-treating services. As of March 30, 1996, Thermo Electron owned
155,400 shares of the Company's common stock. Thermo Electron is a world
leader in environmental monitoring and analysis instruments and a
manufacturer of biomedical products including heart-assist systems and
mammography systems; papermaking and recycling equipment;
alternative-energy systems; industrial process equipment; and other
specialized products. Thermo Electron also provides environmental and
metallurgical services, and conducts advanced technology research and
development.
Thermo Electron has announced that it may repurchase shares of the
Company's common stock from time to time in the open market or in
negotiated transactions. During fiscal 19961, Thermo Electron purchased
129,000 shares of the Company's common stock in the open market for a total
price of $1,916,000.
(b) Financial Information About Industry Segments.
The Company conducts business in one industry segment, environmental
services. Within this segment, the principal products and services are:
soil-remediation services, industrial-remediation services,
nuclear-remediation services, and waste-fluids recycling services.
(c) Description of Business.
(i) Principal Products and Services
The Company is a leading national provider of contaminated
soil-remediation services and a leading regional supplier of
fluids-remediation services. The Company also provides consulting and
environmental management services, and is a major supplier of nuclear-
remediation and safety services at radioactively contaminated sites.
Soil-remediation Services
The Company is a national leader in the design and operation of
nonhazardous soil-remediation facilities, and operates a network of
soil-remediation centers serving customers in more than a dozen states
along the East and West coasts. The Company's soil-remediation centers are
environmentally secure facilities for receiving, storing, and processing
petroleum-contaminated soils. Each site consists principally of a
soil-storage area and a soil-remediation unit (SRU). The Company maintains
standards for acceptance of petroleum-contaminated soil. The customer must
certify that the soil is not "hazardous" as defined by U.S. Environmental
Protection Agency (EPA), state, or local regulations. The Company generates
an individual manifest for each truckload of soil that meets the Company's
acceptance criteria.
1 References to fiscal 1996, 1995, and 1994 herein are for the fiscal
years ended March 30, 1996, April 1, 1995, and April 2, 1994,
respectively.
3PAGE
The market for remediation of petroleum-contaminated soils, as with
many other waste markets, was created by environmental regulations and
economic concerns. The Company believes that the U.S. market for
soil-remediation services will continue, in the short term, to be
predominantly driven by the UST regulations promulgated by the EPA. These
regulations set forth extensive requirements regarding the installation,
removal, monitoring, and testing of USTs. Once a UST has been inspected,
any contaminated soil or water must be disposed of or remediated. The
market for soil-remediation services is driven largely by state programs to
enforce the EPA's UST regulations and to fund cleanups. UST compliance
requirements and attendant remediation costs are often beyond the financial
capabilities of many individuals and smaller companies. To address this
problem, some states have established tax-supported trust funds to assist
in the financing of UST compliance and remediation. Any substantial
decrease in this funding could have a material adverse effect on the
Company's business and financial performance. Many states have realized
that the number of sites requiring remediation and the costs of compliance
are substantially higher than were originally estimated. As a result,
several states have considered reducing compliance requirements in order to
reduce the costs of cleanup. Uncertainty with respect to such anticipated
reductions has already resulted in lower levels of cleanup activity in some
states. Any further reduction in compliance requirements could have a
material adverse effect on the Company's business. In addition, underground
and aboveground tank regulations, clean water legislation, and real estate
transfer and financing transactions also influence demand for
soil-remediation services.
The Company currently provides its soil-remediation services from a
regional network of soil-remediation centers in California, Oregon,
Washington, Florida, South Carolina, Virginia, Maryland, and New York.
Industrial-remediation Services
In December 1995, the Company acquired ReTec, a provider of
consulting, engineering, and on-site services to help clients manage
problems associated with environmental compliance, waste management, and
the remediation of industrial sites contaminated with organic wastes and
residues. ReTec provides particular expertise in managing wastes from
manufactured-gas plants, refineries, and railroad properties. As a leader
in the application of bioremediation technologies, with 17 offices located
in 16 states, ReTec was the first firm to successfully employ
bioremediation as the principal technology to clean up a Superfund site. In
addition, ReTec offers a broad array of remedial solutions, all of which
are applied from a risk management perspective. ReTec concentrates on
providing its clients with low-cost and innovative solutions to complex
problems. For example, ReTec has led successful brownfield redevelopment
projects that have helped transform contaminated properties into productive
assets.
Nuclear-remediation Services
Through its Thermo Nutech business, acquired in June 1995, the Company
provides services to remove radioactive contaminants from soil, as well as
health physics services, radiochemistry laboratory services, radiation
dosimetry services, radiation instrument calibration and repair services,
and radiation-source production. As part of its radiation and
nuclear/health physics services, the Company provides site surveys for
4PAGE
radioactive materials and on-site samples, as well as analysis in support
of decontamination programs and dosimetry services to measure personnel
exposure. As part of its on-site services, the Company usually performs a
preliminary survey using portable radiation-detection equipment. As a
result of this survey, samples are taken at critical locations and are then
analyzed radiometrically and radiochemically in a mobile laboratory
facility at the site or at one of the Company's laboratories. This data is
then used to plan cleanup operations. A substantial part of the Company's
health physics services has been performed under the U.S. Department of
Energy's (DOE), Formerly Utilized Sites Remedial Action Program and Surplus
Facilities Management Program. The Company also supplies reusable thermo
luminescent dosimeter badges. These badges, worn by personnel working in
areas where radioactive material may be present are periodically returned
to the Company for processing to determine the level of radiation exposure.
In addition, using its proprietary segmented-gate system technology, the
Company has helped remove radioactive contaminants from soil at the Defense
Nuclear Fund's site at Johnston Island and at the DOE's Savannah River
site.
Waste-fluids Recycling Services
The Company, through its Thermo Fluids subsidiary, collects, tests,
processes, and recycles used motor oil and other industrial oils. In
addition, the Company collects and recycles oily water and oil filters.
Thermo Fluids has collection facilities located in Phoenix and Tucson,
Arizona, and Las Vegas, Nevada. From these sites, Thermo Fluids operates a
fleet of oil and water collection trucks to pick up waste oils and oily
water.
All waste fluids are tested to identify contaminants and their
concentrations before being loaded into the truck. Each facility consists
of a series of tanks set in protective enclosures used to store the fluids
before processing. Processing of oil consists of straining, filtering, and
blending. Once processed, the oil is sold as burner fuel for a variety of
industrial uses, including use in cement and asphalt kilns, industrial
furnaces, and as "cutter stock" to make marine diesel fuel for large,
oceangoing vessels. Water is processed to reclaim all usable oil and remove
solid contaminants until the water meets sewer discharge standards.
(ii) New Products
The Company has made no commitments to new products that would require
the investment of a material amount of the Company's assets.
(iii) Raw Materials
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's business. To date, the
Company has experienced no difficulties in obtaining these materials.
(iv) Patents, Licenses, and Trademarks
The Company has a perpetual, exclusive, and royalty-free license from
Thermo TerraTech to develop, own, and operate soil-remediation centers and
to employ mobile remediation equipment incorporating Thermo TerraTech's
technology throughout North America (other than in Massachusetts and New
Hampshire). Thermo TerraTech owns one patent with respect to certain
5PAGE
features of its mobile SRU. The Company also relies on its know-how and
trade secrets.
(v) Seasonal Influences
While the Company conducts significant operations year-round, several
of its soil-remediation centers, particularly in Oregon, Virginia, New
York, Washington, and Maryland experience seasonal fluctuations in their
remediation activity due to a reduction in soil excavations during winter
months. In addition, ReTec's engineering and construction business
experiences seasonal fluctuations for some of its field activities. The
Company experienced significant adverse weather during the fourth quarter
of fiscal 1996.
(vi) Working Capital Requirements
In general, there are no special credit terms extended to customers
that would have a material adverse effect on the Company's working capital.
(vii) Dependency on a Single Customer
A substantial portion of the Company's nuclear services have been
provided to the U.S. government. One subcontract for the U.S. government
accounted for approximately 4%, 4%, and 10% of the Company's total revenues
in fiscal 1996, 1995, and 1994, respectively, and a second accounted for
10%, and 4% of the Company's total revenues in fiscal 1996 and 1995,
respectively. All other U.S. government agencies accounted for 12%, 22%,
and 13% of the Company's total revenues in fiscal 1996, 1995, and 1994,
respectively. Management does not believe that this concentration of credit
risk has or will have a significant negative impact on the Company.
(viii)Backlog
The Company's backlog of firm orders was approximately $20,963,000 and
$4,033,000 as of March 30, 1996 and April 1, 1995, respectively. The
Company believes that substantially all of the backlog at March 30, 1996
will be shipped or completed during the next 12 months. Soil-remediation
and waste-fluids recycling services are provided on a current basis
pursuant to purchase orders. Accordingly, there is no backlog for these
services.
(ix) Government Contracts
See Dependency on a Single Customer.
(x) Competition
The Company believes that there are two other companies that operate
fixed-site, thermal-treatment facilities for soil remediation in multiple
states. However, several large waste management companies are analyzing
this market and may compete with the Company in the future. Due to the high
cost of trucking contaminated soils, competition is limited to a geographic
region.
As a consequence of the Company's strategy and customer base, the
Company's current competition is primarily from other fixed-site,
thermal-treatment facilities and, to a lesser extent, from landfills.
However, the market for petroleum-contaminated, soil-processing services is
6PAGE
highly fragmented and the Company also competes with operators of mobile
thermal-treatment facilities, bioremediation and vapor-extraction
technologies and, in certain states, with asphalt plants and brick kilns
that use the contaminated soil in their production processes.
The Company competes primarily based on its ability to offer its
customers superior protection from environmental liabilities. Many of the
Company's largest customers, such as major oil companies, are extremely
sensitive to environmental liability and therefore conduct thorough
environmental audits of soil-treatment facilities before qualifying them as
approved facilities. These approvals constitute an important barrier to
entry into this segment of the soil-remediation market. The Company
believes that it has a competitive advantage in obtaining these
qualifications because of the exacting environmental standards it follows
in operating its facilities.
Although the Company typically prices its services at a premium over
landfills and other treatment technologies, competitive conditions limit
the prices charged by the Company in each local market. Pricing is
therefore a major competitive factor for the Company. The Company believes
that approximately 40% of the petroleum-contaminated soil processed in the
United States is disposed of in landfills. Many existing landfills have
relatively low operating costs and high margins that enable them to accept
contaminated soil at relatively low prices. Reduced levels of economic
activity in many regions of the United States have resulted in increased
competition and declining prices for all forms of soil treatment. As other
companies, some of which may have greater financial and technical resources
than those of the Company, perceive potential for profits in
soil-remediation, competition is expected to increase and may be intense.
Each of ReTec's offices is engaged in highly competitive, regional
markets. ReTec's competition consists of numerous small firms offering
limited services, as well as much larger firms that offer an array of
services. The principal competitive factors for ReTec are: reputation;
experience; breadth and quality of services offered; and technical,
managerial, and business proficiency.
Thermo Nutech faces competition from many large national competitors,
and competes primarily on the basis of its proprietary technology and
price.
Thermo Fluids operates the largest fleet of collection vehicles in
Arizona and Nevada. Thermo Fluids competes with numerous smaller and
several larger collection companies in its current market.
(xi) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental protection regulations will not have a
material adverse effect on its capital expenditures, earnings, or
competitive position.
(xii) Number of Employees
As of March 30, 1996, the Company employed a total of 718 persons.
7PAGE
(d) Financial Information About Exports by Domestic Operations and About
Foreign Operations.
Not applicable.
(e) Executive Officers of the Registrant.
Present Title
Name Age (Year First Became Executive Officer)
-------------------- --- -------------------------------------
Dr. John P. Appleton 61 Chief Executive Officer (1993)
Jeffrey L. Powell 37 President and Chief Operating
Officer (1991)
John N. Hatsopoulos 61 Vice President and Chief Financial
Officer (1993)
Paul F. Kelleher 53 Chief Accounting Officer (1993)
James Lousararian 37 Vice President (1991)
Bruce J. Taunt 45 Vice President, Finance and
Administration (1994)
Nels R. Johnson 45 Vice President (1995)
Robert W. Dunlap 59 Vice President (1996)
Each executive officer serves until his successor is chosen or
appointed by the Board of Directors and qualified or until earlier
resignation, death, or removal. All executive officers except Dr. Appleton,
Mr. Taunt, Mr. Johnson, and Mr. Dunlap have held comparable positions for
at least five years, either with the Company, Thermo TerraTech, or Thermo
Electron. Dr. Appleton has served as a Vice President of Thermo Electron
since 1975 in various managerial capacities and was appointed President,
Chief Executive Officer, and Director of Thermo TerraTech in September
1993. Mr. Taunt has been Vice President of Finance and Administration of
the Company since 1992. Prior to joining the Company, Mr. Taunt was Vice
President and Controller of the Cross Company, a subsidiary of Cross and
Trecker. Mr. Johnson has been Vice President of the Company since 1995. He
has served as President of the Company's Thermo Nutech business since 1988.
Mr. Dunlap has been Vice President of the Company since 1996 and has served
as President of ReTec, which he helped found, since 1985. Messrs. Powell,
Lousararian, Johnson, and Dunlap are full-time employees of the Company.
Dr. Appleton and Mr. Taunt are full-time employees of Thermo TerraTech and
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 Company owns approximately 96 acres primarily in California,
Florida, Oregon, South Carolina, and Maryland, from which it provides
soil-remediation services. The Company occupies approximately 22 acres
principally in South Carolina, Virginia, Washington, California, and New
York, pursuant to leases expiring in fiscal 1998 through 2005, from which
it provides soil-remediation services. The Company also occupies
approximately 12,000 square feet of office and engineering space in
Florida, pursuant to a lease expiring in fiscal 1997.
8PAGE
The Company occupies approximately 91,000 square feet, pursuant to
leases expiring in fiscal 1997 through 2001, in Texas, Montana, North
Carolina, Massachusetts, Colorado, Louisiana, Pennsylvania, Washington,
Minnesota, New York, Indiana, California, and Kansas, from which it
provides industrial remediation services.
The Company leases approximately 35,000 square feet, pursuant to
leases expiring in fiscal 1997 through 1998, in New Mexico, Tennessee, and
California, and owns approximately 34,000 square feet in New Mexico and
California, for which it provides nuclear remediation services.
The Company occupies an aggregate of approximately eight acres on two
sites in Arizona and one site in Nevada, pursuant to leases expiring in
fiscal 1997 and 1998, consisting of office space, fluids-recycling and
maintenance facilities, and sites for fluids storage tanks.
The Company believes that these facilities are adequate for its
present operations and that other suitable space is readily available if
any of such leases are not extended.
Item 3. Legal Proceedings
In February 1996, the Company settled its previously disclosed
litigation with Recycling Sciences International, Inc. on terms that were
not material to the Company's results of operations or financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
9PAGE
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder
Matters
Information concerning the market and market price for the
Registrant's Common Stock, $.01 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 "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 as of March 30,
1996, are included in the Registrant's Fiscal 1996 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.
10PAGE
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 "Disclosure of Certain Late Filings" 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.
11PAGE
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
Certain 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 the notes thereto.
(b) Reports on Form 8-K.
None.
(c) Exhibits.
See Exhibit Index on the page immediately preceding exhibits.
12PAGE
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: May 31, 1996 THERMO REMEDIATION INC.
By: John P. Appleton
--------------------------------
John P. Appleton
Chairman 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 May 31, 1996.
Signature Title
--------- -----
By:John P. Appleton Chairman of the Board, Chief Executive
------------------------ Officer, and Director
John P. Appleton
By:Jeffrey L. Powell President, Chief Operating Officer,
------------------------ and Director
Jeffrey L. Powell
By:John N. Hatsopoulos Vice President and Chief Financial
------------------------ Officer
John N. Hatsopoulos
By:Paul F. Kelleher Chief Accounting Officer
------------------------
Paul F. Kelleher
By:Elias P. Gyftopoulos Director
------------------------
Elias P. Gyftopoulos
By:Fred Holubow Director
------------------------
Fred Holubow
By:Theo Melas-Kyriazi Director
------------------------
Theo Melas-Kyriazi
By:Frank E. Morris Director
------------------------
Frank E. Morris
By:William A. Rainville Director
------------------------
William A. Rainville
13PAGE
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Thermo Remediation Inc.:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermo
Remediation Inc.'s Annual Report to Shareholders incorporated by reference
in this Form 10-K, and have issued our report thereon dated May 7, 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 12 is
the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic consolidated financial statements. This
schedule has been subjected to the auditing procedures applied in the
audits of the basic consolidated financial statements and, in our opinion,
fairly states in all material respects the consolidated financial data
required to be set forth therein in relation to the basic consolidated
financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
May 7, 1996
14PAGE
SCHEDULE II
THERMO REMEDIATION INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Balance Charged
Allowance at to Costs Accounts Balance
for Doubtful Beginning and Accounts Written- at End
Accounts(a) of Year Expenses Recovered off Other(b) of Year
-------------- --------- -------- --------- --------- --------- -------
Year Ended:
March 30, 1996 $ 394 $ (184) $ 12 $ (96) $ 660 $ 786
April 1, 1995 $ 415 $ 15 $ - $ (55) $ 19 $ 394
April 2, 1994 $ 282 $ 298 $ - $ (165) $ - $ 415
(a) Historical data has been restated to reflect the June 1995 acquisition
of Thermo Nutech from Thermo TerraTech Inc., accounted for in a manner
similar to the pooling-of-interests method.
(b) Includes allowance of businesses acquired during the year as described
in Note 3 to the Consolidated Financial Statements in the Registrant's
fiscal 1996 Annual Report to Shareholders.
15PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
2.1 Form of Agreement of Merger between Thermo Remediation
Inc. (California) and Thermo Remediation Inc. (Delaware)
(filed as Exhibit 2.1 to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
2.2 Securities Purchase Agreement dated as of September 27,
1993 between TPS Technologies Inc. and the Registrant
(filed as Exhibit 2.2 to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
2.3 Asset Transfer Agreement dated as of October 1, 1993
among Thermo TerraTech Inc. (formerly Thermo Process
Systems Inc.), TPS Technologies Inc. and the Registrant
(filed as Exhibit 2.3 to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
2.4 Exclusive License Agreement dated as of October 1, 1993
among Thermo TerraTech Inc. (formerly Thermo Process
Systems Inc.), TPS Technologies Inc. and the Registrant
(filed as Exhibit 2.4 to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
2.5 Non-Competition and Non-Disclosure Agreement dated as of
October 1, 1993 among Thermo TerraTech Inc. (formerly
Thermo Process Systems Inc.)., TPS Technologies Inc. and
the Registrant (filed as Exhibit 2.5 to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-70544]
and incorporated herein by reference).
3.1 Certificate of Incorporation of the Registrant (filed as
Exhibit 3.1 to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein
by reference).
3.2 Bylaws of the Registrant (filed as Exhibit 3.2 to the
Registrant's Registration Statement on Form S-1 [Reg.
No. 33-70544] and incorporated herein by reference).
10.1 Corporate Services Agreement dated June 1, 1992, between
Thermo Electron Corporation and the Registrant (filed as
Exhibit 10.1 to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein
by reference).
10.2 Thermo Electron Corporate Charter, as amended and
restated effective January 3, 1993 (filed as Exhibit
10.1 to Thermo Electron's Annual Report on Form 10-K for
the fiscal year ended January 2, 1993 [File No. 1-8002]
and incorporated herein by reference).
16PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.3 Tax Allocation Agreement dated as of June 1, 1992
between Thermo TerraTech Inc. (formerly Thermo Process
Systems Inc.) and the Registrant (filed as Exhibit 10.3
to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by
reference).
10.4 Securities Purchase Agreement dated as of September 27,
1993 between Fred Holubow and the Registrant (filed as
Exhibit 10.5 to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein
by reference).
10.5 Master Repurchase Agreement dated January 1, 1994
between the Registrant and Thermo Electron Corporation
(filed as Exhibit 10.6 to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-77818] and
incorporated herein by reference).
10.6 Equity Incentive Plan of the Registrant (filed as
Exhibit 10.7 to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein
by reference).
10.7 Deferred Compensation Plan for Directors of the
Registrant (filed as Exhibit 10.8 to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-70544]
and incorporated herein by reference).
10.8 Amended and Restated Directors Stock Option Plan (filed
as Exhibit 10.8 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended April 1, 1995 [File
No. 1-12636] and incorporated herein by reference).
10.9 Form of Indemnification Agreement for Officers and
Directors (filed as Exhibit 10.10 to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-70544]
and incorporated herein by reference).
10.10 Stock Purchase and Note Issuance Agreement dated as of
November 22, 1993, between Thermo TerraTech Inc.
(formerly Thermo Process Systems Inc.) and the
Registrant (filed as Exhibit 10.11 to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-70544]
and incorporated herein by reference).
10.11 $2,650,000 principal amount Subordinated Convertible
Note dated as of November 22, 1993, made by the
Registrant, issued to Thermo TerraTech Inc. (formerly
Thermo Process Systems Inc.) (filed as Exhibit 10.12 to
the Registrant's Registration Statement on Form S-1
[Reg. No. 33-70544] and incorporated herein by
reference).
17PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.12 Note dated December 24, 1994 from Thermo Remediation
Inc. to Thermo Electron Corporation (filed as Exhibit
10.12 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended April 1, 1995 [File No. 1-12636]
and incorporated herein by reference).
10.13 Asset Purchase Agreement dated as of November 19, 1993
by and among All Western Oil, Inc. and certain
affiliates thereof and Thermo Fluids Inc. (filed as
Exhibit 10.13 to the Registrant's Registration Statement
on Form S-1 [Reg. No. 33-70544] and incorporated herein
by reference).
10.14 First Addendum to Asset Purchase Agreement dated as of
August 7, 1994 among All Western Oil, Inc. and certain
affiliates thereof and Thermo Fluids Inc. (filed as
Exhibit 10.1 to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 1, 1994
[File No. 1-12636] and incorporated herein by
reference).
10.15 Promissory Note in the principal amount of $700,000,
dated August 7, 1994 (filed as Exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended October 1, 1994 [File No. 1-12636]
and incorporated herein by reference).
10.16 Security Agreement dated as of August 7, 1994 among All
Western Oil, Inc. et al. and Thermo Fluids Inc. (filed
as Exhibit 10.3 to the Registrant's Quarterly Report on
Form 10-Q for the fiscal quarter ended October 1, 1994
[File No. 1-12636] and incorporated herein by
reference).
10.17 Purchase and Sale Agreement dated as of December 20,
1994 by and among TPS Technologies Inc., TPST Soil
Recyclers of Maryland Inc., Rafich Corporation, Harry
Ratrie, John C. Cyphers and J. Thomas Hood (filed as
Exhibit 1 to the Registrant's Current Report on Form 8-K
for the events occurring on December 21, 1994 [File No.
1-12636] and incorporated herein by reference).
10.18 Master Reimbursement Agreement dated January 1, 1994
between the Registrant, Thermo Electron Corporation, and
Thermo TerraTech Inc. (formerly Thermo Process Systems
Inc.) (filed as Exhibit 10.22 to Thermo TerraTech's
Annual Report on Form 10-K for the fiscal year ended
April 2, 1994 [File No. 1-9549] and incorporated herein
by reference).
18PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
--------------------------------------------------------------------------
10.19 Agreement and Plan of Merger dated as of the 1st day of
December, 1995, by and among the Registrant, TRI
Acquisition Inc. and Remediation Technologies, Inc.
(filed as Exhibit 2(a) to Thermo TerraTech's Current
Report on Form 8-K relating to the events occurring on
December 8, 1995 [File No. 1-9549] and incorporated
herein by reference).
10.20 Agreement and Plan of Merger dated as of June 28, 1995,
by and among the Thermo TerraTech Inc. Eberline
Acquisition Inc., the Registrant and Eberline Holdings
Inc. (filed as Appendix B to the Registrant's Proxy
Statement for the Annual Meeting held on December 13,
1995 [File No. 1-12636] and incorporated herein by
reference).
11 Statement re: Computation of Earnings per Share.
13 Annual Report to Shareholders for the fiscal year ended
March 30, 1996 (only those portions incorporated herein
by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.