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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 December 31, 1994
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-8002
THERMO ELECTRON CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 04-2209186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street, P.O. Box 9046
Waltham, Massachusetts 02254-9046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $1.00 par value New York Stock Exchange
Preferred Stock Purchase Rights
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to the
filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or
information statements incorporated by reference into Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of January 27, 1995, was approximately $2,200,490,000.
As of January 27, 1995, the Registrant had 51,000,776 shares of Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 1994, 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 May 23, 1995, are incorporated by
reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business
Thermo Electron Corporation and its subsidiaries (the Company or the
Registrant) develop, manufacture, and market environmental monitoring and
analysis instruments, biomedical products including heart-assist systems
and mammography systems, paper-recycling and papermaking equipment,
alternative-energy systems, industrial process equipment, and other
specialized products. The Company also provides environmental and
metallurgical services and conducts advanced technology research and
development. The Company performs its business through its divisions and
wholly owned subsidiaries, as well as majority-owned subsidiaries that are
partially owned by the public or by private investors.
The Company has developed leading market positions in many lines of
business, including environmental monitoring and analysis instruments,
mammography systems, biomass power plants, and paper-recycling equipment.
The Company is currently seeking to establish leading market positions in
the fields of left ventricular-assist systems, explosives-detection
systems, soil-remediation services, and dedicated natural gas engines. The
Company is developing new products in its Advanced Technologies segment, as
well as in other segments.
A key element in the Company's growth has been its ability to commercialize
innovative products and services emanating from research and development
activities conducted at the Company's various subsidiaries and divisions.
The Company's strategy has been to identify business opportunities arising
from social, economic, and regulatory issues and to seek a leading market
share through the application of proprietary technology. As part of this
strategy, the Company continues to focus on the acquisition of
complementary businesses that can be integrated into its existing core
businesses to leverage the Company's access to new markets.
The Company believes that maintaining an entrepreneurial atmosphere is
essential to its continued growth and development. In order to preserve
this environment, the Company adopted the strategy of spinning out certain
of its subsidiaries and having these subsidiaries sell a minority interest
to outside investors. The Company believes that this strategy provides
additional motivation and incentives for the management of the subsidiaries
through the establishment of subsidiary-level stock options, as well as
capital to support the subsidiaries' growth. The Company's wholly owned and
majority-owned subsidiaries are provided with centralized strategic
planning, corporate development, administrative, financial, and other
services that would not be available to many independent companies of
similar size. As of March 3, 1995, the Company had 13 subsidiaries that
have sold minority equity interests, 11 of which are publicly traded.
On February 8, 1995, the Company entered into a definitive agreement to
acquire Coleman Research Corporation (CRC) in exchange for up to 2,669,158
shares of Company common stock, including approximately 146,900 shares
reserved for issuance upon exercise of stock options. CRC provides systems
integration, systems engineering, and analytical services to government
customers in the fields of information technology, energy and the
environment, software engineering, launch systems, advance radar and
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imaging, and health systems. The acquisition is subject to certain
conditions, including the approval of CRC's shareholders, and is expected
to be consummated on or about March 15, 1995. If completed, the acquisition
of CRC will be accounted for using the pooling-of-interests method.
The Company is a Delaware corporation and was incorporated in 1956. The
Company completed its initial public offering in 1967 and was listed on the
New York Stock Exchange in 1980. The principal executive office of the
Company is 81 Wyman Street, Waltham, Massachusetts 02254-9046 (telephone:
617-622-1000).
(b) Financial Information About Industry Segments
The Company's products and services are divided into six segments:
Instruments, Alternative-energy Systems, Process Equipment, Biomedical
Products, Environmental Services, and Advanced Technologies. Products or
services within a particular segment are provided by more than one
subsidiary, and certain subsidiaries' products or services are included in
more than one segment. The principal products and services offered by the
Company in the six industry segments are described in detail below (see
"Principal Products and Services"). Financial information concerning the
Company's industry segments is summarized in Note 14 to Consolidated
Financial Statements in the Registrant's 1994* Annual Report to
Shareholders and is incorporated herein by reference.
(c) Description of Business
(i) Principal Products and Services
Instruments
The Company, through its Thermo Instrument Systems Inc. subsidiary, is a
worldwide leader in the development, manufacture, and marketing of
analytical instruments used to detect and measure air pollution, nuclear
radioactivity, complex chemical compounds, toxic metals, and other elements
in a wide variety of materials. Thermo Instrument also markets process
monitoring and control instruments for the oil, gas, and petrochemical
industries. Through Thermo Instrument's 86%-owned subsidiary, ThermoSpectra
Corporation, the Company develops, manufactures, and markets precision
imaging, inspection, and measurement instrumentation that employ a variety
of energy sources, or signals, as well as high-speed data acquisition and
digital processing technologies.
In recent years, Thermo Instrument has completed a number of key
acquisitions to expand and complement its existing lines of instruments,
including: Finnigan Corporation, a leading manufacturer of mass
spectrometers, in May 1990; Nicolet Instrument Corporation, a leading
manufacturer of instruments for numerous analytical, chemistry,
engineering, and other applications, in August 1992; Spectra-Physics
Analytical, a manufacturer of high performance liquid chromatography and
capillary electrophoresis analytical instruments, in February 1993; and
several of the businesses within the EnviroTech Measurements & Controls
group of Baker Hughes Incorporated, manufacturers of products used for
process control, process measurement, and laboratory analysis, in March
1994. In addition, on March 1, 1995, Thermo Instrument entered into an
Asset and Stock Purchase Agreement with Fisons plc (Fisons) relating to the
* References to 1994, 1993, and 1992 herein are for the fiscal years ended
December 31, 1994, January 1, 1994, and January 2, 1993, respectively.
3PAGE
acquisition by Thermo Instrument of Fisons' Scientific Instruments Division
(the Division) for a purchase price of 202 million British pounds sterling,
subject to a post-closing adjustment. The Division is principally composed
of Fisons operations that are involved in the research, development,
manufacture, and sale of analytical instruments to industrial and research
laboratories worldwide. Consummation of the acquisition is subject to
several conditions, including approval by Fisons shareholders, regulatory
approvals, consent of certain third parties and customary conditions to
closing.
Instruments manufactured and marketed by the Company employ a variety of
advanced technologies and spectral, electroanalytical, and separation
techniques to determine the composition, or structure, and physical
properties of natural and synthetic substances. The Company's instruments
can be broadly categorized by their use as analytical, monitoring, or
process control instruments.
Analytical Instruments
The Company's principal analytical instrument products are atomic emission
and absorption spectrometers, Fourier transform infrared (FT-IR) and
FT-Raman spectrometers, mass spectrometers, high performance liquid
chromatographs, gas chromatographs, and X-ray fluorescence instrumentation.
Atomic emission (AE) and atomic absorption (AA) spectrometers identify and
measure trace quantities of metals, and other elements, in a wide variety
of materials, including environmental samples (such as soil, water, and
wastes), foods, drugs, cosmetics, and alloys. The Company sells its
products to a wide range of customers in manufacturing industries such as
producers of aircraft, automobiles and trucks, computers, chemicals, food,
pharmaceuticals, and primary metals; service industries such as waste
management companies and commercial testing laboratories; and government
and university laboratories.
The Company is a leading manufacturer of sequential AE spectrometers, in
which elements are analyzed one at a time, and simultaneous AE
spectrometers, in which many elements can be measured at the same time. The
Company produces AA spectrometers in single-, double-, and four-channel
models. The Company is the only major producer of multichannel AA
spectrometers, which provide several operational advantages over
single-channel instruments, including speed of analysis, increased
accuracy, reduced sample consumption, and analysis over an extended range
of concentrations.
The Company's FT-IR and FT-Raman spectrometers are designed to
nondestructively determine the chemical composition and physical properties
of materials. These instruments are used in many areas of chemical
research, industrial quality control and process monitoring, and for
solving a wide variety of materials analysis problems. The Company offers a
variety of models ranging from recently introduced models designed for
routine applications to highly advanced research-grade FT-IR spectrometers.
The Company is a leading manufacturer of commercial mass spectrometers and
has pioneered many of the significant developments and applications of mass
spectrometry. The Company's mass spectrometry products identify and measure
the components of a sample for organic chemical compounds or for inorganic
elements. These instruments are used by customers in environmental analysis
and pollution control; in research and the production of pharmaceuticals;
4PAGE
in biochemistry; in analysis of foods, chemicals, and petrochemicals; and
in health and forensic science. The Company provides both stand-alone mass
spectrometers and combined systems that use its own chromatographs or those
purchased from other companies. These products span a range of sensitivity,
specificity, separation technologies, data-handling capabilities, sizes,
and prices.
The Company sells high performance liquid chromatography, capillary
electrophoresis, and related instruments and equipment used principally in
the research and development and production monitoring of pharmaceuticals,
chemicals, and personal-care products, and for environmental monitoring.
These instruments separate the chemical components of substances for
purposes of identification and measurement. Capillary electrophoresis is a
relatively new separation technique that is based on a combination of
chromatographic and electroanalytical technologies and is particularly
useful in biochemical and pharmaceutical research.
In 1994, with Thermo Instrument's acquisition of the Tremetrics and TN
Technologies businesses from Baker Hughes, the Company added two analytical
testing technologies: gas chromatography and X-ray fluorescence. Gas
chromatographs are widely used in environmental and industrial laboratories
as stand-alone instruments or in conjunction with mass spectrometers, where
the gas chromatograph separates a sample into individual chemical
components for the mass spectrometer to identify. Applications include the
identification of organic compounds, from pesticide residues on vegetables
to chlorinated organics in drinking water. The Company sells a wide variety
of gas chromatography detectors that measure trace levels of pollutants in
water, soil, and air. X-ray fluorescence instruments allow for the
nondestructive analysis of inorganic elements. Applications include alloy
identification, on-line process monitoring and quality control,
characterization of toxic metals in soil, and thickness and/or composition
of semiconductor thin films. In addition, the Company manufactures and
markets digital oscilloscopes, multichannel transient recorders,
high-resolution waveform analyzers, laser scanning confocal microscopes,
and X-ray microanalysis equipment, as well as X-ray imaging systems used
for quality assurance and failure analysis applications primarily in the
electronics industry.
Monitoring Instruments
The Company also manufactures monitoring instruments for two principal
markets: the detection and measurement of nuclear radiation, and the
monitoring of air pollutants including toxic and combustible gases.
The Company's nuclear radiation monitoring instruments detect and measure
alpha, beta, gamma, neutron, and X-ray radiation emitted by natural sources
and by radioactive materials used in nuclear power plants and certain
governmental, industrial, and medical facilities. The Company is a leading
manufacturer of a broad range of stand-alone and portable instruments and
computer-integrated instrument systems used to ensure the safety of
personnel from exposure to nuclear radiation. Nuclear power plants and U.S.
Department of Energy facilities purchase approximately 70% of the radiation
monitoring instruments sold by the Company.
The Company's air-monitoring instruments measure pollutants in ambient air
and from stationary sources such as industrial smokestacks. The principal
pollutants measured are oxides of nitrogen, sulfur dioxide, carbon
monoxide, ozone, and volatile organic compounds. These instruments are used
5PAGE
by utility and industrial customers to ensure compliance with environmental
regulations, by government agencies to monitor air quality, and by research
facilities. The Occupational Safety and Health Administration's safety
requirements for protecting workers from toxic or explosive atmospheres in
confined spaces are addressed with the Company's detectors, instruments,
and systems for sensing, monitoring, and warning of such dangers. These
worker-safety products are used in a wide range of applications, from large
petrochemical plants, utilities, and industrial manufacturing facilities to
commercial buildings.
In addition, the Company manufactures equipment that provides on-line,
real-time analysis of elements in bulk raw materials, such as coal and
cement. These analyzers are used by utilities to determine the sulfur
content of coal to ensure compliance with air quality standards and by the
cement industry to test raw materials to assure product quality and
uniformity.
Process Control Instruments
With the 1994 acquisition of the EnviroTech Controls business from Baker
Hughes, the Company now addresses the process monitoring, analysis,
gauging, and control instruments market, primarily for the oil, gas, and
petrochemical industries.
The Company manufactures and markets a number of process monitoring,
analysis, and control systems including: analog and digital recorders for
continuous process industries; process and laboratory analytical
instruments and monitors to detect lethal gases in the oil, gas, and
petrochemical industries; supervisory control and data acquisition software
for process monitoring and operator interface in a variety of industrial
processes; and turnkey, integrated systems to control networks of distant
oil and gas wells.
The Company also manufactures and markets process gauges and noncontacting
and nonintrusive process control instrumentation to measure liquid levels,
density, weight, and flows for a variety of industries. Application
examples include measuring levels in a pharmaceutical reactor, determining
the percentage by weight of solids contained in a mining slurry, or
monitoring the flow of fluid into a wastewater treatment facility.
Revenues from instrument products were $650,114,000, $516,712,000, and
$349,261,000 in 1994, 1993, and 1992, respectively.
Alternative-energy Systems
The Company's Alternative-energy Systems segment includes the operation
and, prior to 1994, the construction and sale, of independent (nonutility)
power plants. Beginning in early 1994, the Company began operation of a
waste-recycling facility. This segment also includes the manufacture, sale,
and servicing of industrial refrigeration systems; natural gas and marine
engines; packaged cooling and cogeneration systems; and steam turbines and
compressors.
Alternative-energy Power Plants
Through its Thermo Ecotek Corporation (formerly Thermo Energy Systems
Corporation) subsidiary, the Company designs, develops, owns, and operates
6PAGE
independent (nonutility) electric power generation facilities that utilize
a range of environmentally responsible combustion technologies. The
facilities are either owned by the Company or sold to third parties upon
completion and operated by the Company. The Company has completed and
operates three wood-waste power plants and four agricultural-waste power
plants, representing a net electric generating capacity of approximately
140 megawatts.
The Company also has substantial capabilities in developing and operating
fossil-fuel cogeneration systems, which generate electricity and thermal
energy in the form of steam or hot or chilled water. The Company has built,
on a turnkey basis, three fossil-fuel cogeneration systems that are owned
and operated by others, and one system in Dade County, Florida, that is
owned by a third party and operated by a joint venture of which the Company
is a partner.
The facilities that are leased by the Company are owned by institutional
investors and leased on a long-term basis to the Company or to joint
ventures or partnerships in which the Company has ownership interests. The
Company uses internal funds for preconstruction development expenses and
generally obtains external financing for construction. The Company has
equity ownership interests in three operating plants. The Company may make
additional significant equity investments in future projects. The process
of locating, developing, financing and constructing power plants is highly
complex, lengthy and expensive and only a small percentage of the power
projects that the Company evaluates or pursues results in operating
projects.
The Company participates in the operation of the Dade County Downtown
Government Center cogeneration plant in Miami, Florida, through a joint
venture of the Company and Rolls-Royce, Inc. Because the demand for power
and chilled water at the Downtown Government Center complex has been
substantially less than anticipated since the plant's startup in 1987, the
joint venture has experienced continuing losses. The Company is involved in
litigation and regulatory proceedings with respect to this project (see
Item 3, "Legal Proceedings" below). In September 1994, the joint venture
temporarily suspended operations at the facility for an indefinite period
of time although it will continue to be responsible for lease and other
fixed costs.
Revenues from the operation and construction of alternative-energy power
plants were $134,261,000, $128,558,000, and $140,561,000 in 1994, 1993, and
1992, respectively.
Waste-recycling Facility
In early 1994, the Company completed construction and commenced operation
of a 2,100-ton-per-day municipal solid waste-recycling facility (the
Recycling Facility) in San Diego County, California (the County). The
Recycling Facility is the first such facility that the Company has built or
operated. The construction of the Recycling Facility was financed by the
issuance by the California Pollution Control Financing Authority of $133.7
million principal amount of bonds (the CPCFA Bonds). The Company has
entered into a 24-year agreement with the County under which the Company
will recycle materials recovered from the County's waste stream for a
service fee to reduce the volume of remaining waste. The service fee is
calculated pursuant to a formula that includes a provision for debt service
for the CPCFA Bonds, a pass-through of certain costs of operating the
Recycling Facility, an operation and maintenance allowance, and an
allocation of a portion of the proceeds from the resale of recovered
7PAGE
materials generated by the Recycling Facility. The Company has contracted
the operations and maintenance of the Recycling Facility to a joint venture
that is owned 50% by the Company. The County has guaranteed that certain
minimum amounts of waste will be brought to the Recycling Facility and the
Company has guaranteed that the Recycling Facility is capable of processing
a minimum amount of waste and of yielding certain percentages of recovered
materials from recoverable waste. Except for risks associated with the
nonperformance by the County of its obligations, the Company bears most
business and legal risks associated with operating the Recycling Facility.
(See also "Management's Discussion and Analysis of Financial Condition and
Results of Operations" incorporated by reference into Item 7 hereof.)
Other
The Company, through its Thermo Power Corporation subsidiary, develops,
manufactures, markets, and services environmentally sound and economically
efficient industrial refrigeration equipment, natural gas-fueled and
low-emission natural gas engines for vehicular and stationary applications
and commercial cooling and cogeneration units.
Through its industrial refrigeration business, the Company provides
environmentally sound solutions to the refrigeration needs of the
food-processing, petrochemical, and pharmaceutical industries. More than
80% of the Company's FES division's refrigeration products operate on
ammonia, a non-ozone depleting alternative to the chlorofluorocarbon
refrigerants gradually being phased out by government regulations. The 1994
acquisition of NuTemp, Inc., which rents and sells new and remanufactured
commercial cooling and industrial refrigeration equipment, provides the
Company with the opportunity to broaden the product lines and services it
offers.
Many of Thermo Power's products are powered by its low-emission dedicated
natural gas-fueled TecoDrive(R) engines. Thermo Power has supplied major
fleet operators such as United Parcel Service and the U.S. Postal Service,
as well as Blue Bird Corporation, a major school bus manufacturer, with
TecoDrive engines to power their vehicles. Thermo Power's Crusader Engines
division also manufactures natural gas engines for stationary applications,
including irrigation equipment. Other products that operate with TecoDrive
engines include cooling and cogeneration systems sold by Thermo Power's
Tecogen division, and its newly introduced gas engine-driven refrigeration
systems.
Through its Tecogen division, the Company also conducts sponsored research
and development on advanced systems for clean-coal combustion. The newest
application of Thermo Power's combustion technology under development is a
line of propane-powered lighting products, including flashlights, area
lights or lanterns, and hazard lights.
The Tecogen division is also developing a low-cost system for converting a
diesel-fueled engine to operate solely on natural gas, without major
modifications to the engine. This conversion kit will be designed to
provide fleet managers a system for converting their diesel-powered
vehicles to operate on natural gas, a much cleaner fuel.
The Company's Alternative-energy Systems segment also includes its Peter
Brotherhood Ltd. subsidiary, a U.K.-based manufacturer of steam turbines
and compressors.
8PAGE
Process Equipment
The Company designs, manufactures, and sells advanced, custom-engineered
processing machinery, including paper-recycling and papermaking equipment,
metallurgical thermal-processing systems, and electroplating systems.
Paper-recycling and Papermaking Equipment
Through its Thermo Fibertek Inc. subsidiary, the Company designs and
manufactures processing machinery and accessories for the paper-recycling
and papermaking industries. The Company's principal products in this
business include custom-engineered systems and equipment for the
preparation of wastepaper for conversion into recycled paper, and accessory
equipment and related consumables important to the efficient operation of
papermaking machines. The Company has developed technologically advanced
equipment for the preparation of white recycled fiber (e.g. printing and
office paper, newsprint, and tissue). The Company sells in countries
outside the Pacific Rim technologically advanced equipment for the
preparation of brown recycled fiber (e.g. corrugated boxes and paper bags)
pursuant to a license from Aikawa Iron Works Co., Ltd., a leading Japanese
manufacturer of this equipment.
Thermo Fibertek also designs and manufactures accessories used in the
papermaking industry, including doctor blades and showers that perform
on-line continuous cleaning of the fabrics and rolls used in the
papermaking process. This cleaning process is important to papermakers
because it reduces machine breakdowns, extends the life of consumable paper
machine fabrics, and improves paper quality. Through Thermo Fibertek's AES
division, which was acquired in 1993, the Company also manufactures water-
management systems used in papermaking.
During December 1994, a wholly owned subsidiary of the Company entered into
a $145 million contract for engineering, procurement, and construction
services for an office wastepaper de-inking facility to be located in
Menominee, Michigan. Construction is expected to take place over
approximately two years. Thermo Fibertek will supply approximately $15
million of equipment and services under the contract over a two year
period.
Revenues from paper-recycling and papermaking equipment were $162,625,000,
$137,088,000, and $125,577,000 in 1994, 1993, and 1992, respectively.
Metallurgical Thermal-processing Systems
The Company, through the Holcroft division of its Thermo Process Systems
Inc. subsidiary, designs, manufactures, and sells computer-controlled,
custom-engineered thermal-processing systems used to treat primary metals
and metal parts. Holcroft's products include controlled-atmosphere systems
used to impart desirable metallurgical properties, such as added tensile
strength and wear resistance, and vacuum heat-treating systems used in
forming metals into desired shapes.
The Company also manufactures electroplating systems, heavy metal and
waste-treatment systems, and aqueous cleaning systems that offer an
alternative to the use of ozone-damaging solvents in a variety of
production processes.
9PAGE
Biomedical Products
The Company's Biomedical Products segment comprises a number of different
businesses, several of which have developed out of the Company's research
related to left ventricular-assist systems, which began in 1966. In
addition, the Company has made several acquisitions, including
International Technidyne Corporation (ITC) in 1991, the biomedical division
of Nicolet Instrument Corporation (Nicolet Biomedical) and Lorad
Corporation in 1992, and CBI Laboratories, Inc. in 1993.
The Company, through its Thermo Cardiosystems Inc. subsidiary, has
developed two versions of an implantable left ventricular-assist system
(LVAS): an pneumatic system that can be controlled by either a bedside
console or portable unit, and an electric system that features an internal
electric monitor powered by an external battery-pack worn by the patient.
These devices are designed to perform substantially all or part of the
pumping function of the left ventricle of the natural heart for patients
suffering from cardiovascular disease. Unlike a total artificial heart
system, which requires removal of the natural heart, an LVAS allows the
natural heart to remain in place and assists the heart when it is unable to
provide sufficient cardiac function to maintain life. In October 1994, the
U.S. Food and Drug Administration (FDA) granted approval for commercial
sales of the pneumatic LVAS. With this approval, the pneumatic system is
available for sale to cardiac centers throughout the United States. In
April 1994, the Company received the European Conformity Mark (CE Mark) for
the commercial sale of the pneumatic LVAS in all European Community
Nations. The electric version of the LVAS is currently being used in
clinical trials for patients awaiting heart transplants and may not be sold
commercially in the U.S. until it has received approval from the FDA.
The Company's Thermedics Inc. subsidiary develops, manufactures, and
markets enteral nutrition-delivery systems and proprietary medical-grade
plastics marketed under the names Tecoflex(R) and Tecothane(R), which are
thermoplastic polyurethanes used in medical disposables and industrial
products.
ITC is a leading manufacturer of hemostasis management products, including
blood coagulation-monitoring instruments. ITC also manufactures and markets
skin-incision devices that can draw minute but medically significant blood
samples through precisely controlled, pain-free incisions.
Nicolet Biomedical is a leading manufacturer of biomedical instruments for
assessing muscle, nerve, sleep, hearing, and brain blood-flow disorders and
for related work in clinical neurophysiology. These instruments are used in
hospitals, clinics, universities, private practice medical offices, and
medical research facilities by physicians and technologists for routine
clinical testing and intra-operative monitoring. Nicolet Biomedical also
manufactures systems that record and display spontaneous brain waves in the
form of a topographic colored "map." Such maps of brain activity are used
in conjunction with other measurements to assist in the diagnosis of
various neurologic disorders.
Lorad is a leading manufacturer of low-dose X-ray mammography equipment and
minimally invasive needle-biopsy systems. In 1992, Lorad introduced a
digital imaging mammography system designed to target only a specific area
of the breast where a suspicious lesion has been detected, creating a
digital image of the lesion on a video monitor within seconds of taking an
X-ray. Digital imaging has advantages over traditional X-ray mammography
10PAGE
because once the X-ray has been digitally acquired, the radiologist can
manipulate and enhance the image quality to scrutinize subtle differences
that may go undetected on a film-based X-ray. Lorad is expanding the
capabilities of its digital imaging system into a digital screening system
capable of imaging the whole breast rather than just a specific area. The
FDA is currently evaluating whether parties seeking clearance to market a
full-breast digital imaging system will be required to submit a premarket
approval application or a 510(k) application. The Company does not expect
to submit data to the FDA seeking market clearance for its full-breast
digital imaging system before the end of 1995.
Lorad's needle-biopsy systems provide a less-invasive alternative to
conventional surgical biopsies. Compared with open surgery, these needle
techniques are less traumatic to the patient, result in less scarring,
which can affect the accuracy of future mammograms, and are performed on an
outpatient basis at a significantly lower cost.
In December 1993, the Company's ThermoTrex Corporation subsidiary acquired
CBI Laboratories, Inc., a manufacturer of skin-care, bath, and body
products sold through salons, spas, and stores. It is anticipated that CBI
will manufacture the proprietary lotion that is an integral part of the
laser-based system being developed by ThermoLase Corporation for the
long-term removal of unwanted hair. ThermoLase is a majority-owned
subsidiary of ThermoTrex (see "Advanced Technologies").
Thermedics also manufactures Scent Seal* fragrance samplers, which were
developed from the Company's polymer technology. Scent Seal fragrance
samplers are used to seal renditions of scents in perfume and food
advertisements for magazines, and offer an alternative to commonly used
fragrance strips.
Environmental Services
Through a network of facilities owned and operated by a joint venture
between Thermo Instrument and Thermo Process, called Thermo Terra Tech, the
Company provides comprehensive laboratory-based environmental testing,
analysis, and related services for the detection, measurement, and
monitoring of hazardous wastes and radioactive materials. The Company's
services also include design and construction inspection of water supply
and wastewater treatment facilities, surveying and site planning,
transportation engineering services, solid waste management services, and
building services.
Thermo Remediation Inc., a majority-owned subsidiary of Thermo Process,
provides soil-remediation services at a network of regional centers that
serve customers mainly on the East and West coasts. These soil-remediation
centers thermally treat soils to remove and destroy petroleum contamination
caused by leaking storage tanks, spills, and other sources. Thermo
Remediation also operates a waste fluids-recycling facility through a
fluids-recovery company based in Arizona. A majority-owned subsidiary of
Thermo Process, J. Amerika N.V., provides underground tank removal and
other environmental services from its Netherlands-based operation.
In addition, metallurgical heat-treating services are provided for
customers in the automotive, aerospace, defense, and other industries. The
Company also provides metallurgical fabrication services, principally on
* Scent Seal is a trademark of Scent Seal Inc.
11PAGE
high-temperature materials, for customers in the aerospace, medical,
electronics, and nuclear industries.
Advanced Technologies
The Company's ThermoTrex Corporation subsidiary conducts sponsored research
and development and is also attempting to commercialize new products based
on advanced technologies it has developed in its laboratories. Sponsored
research and development conducted by this subsidiary, principally for the
U.S. government, includes basic and applied research in electro-optic and
electro-acoustic systems, signal processing, materials technology, lasers,
and direct-energy conversion.
Research and development currently in progress by ThermoTrex includes the
development of a passive microwave camera that is intended to "see" through
clouds and fog to enhance safety in aerial navigation, the Sonic CT(TM)
(computed tomography) system for the early detection of breast cancer, a
blood-flow measurement system, called the Doppler CT, for the diagnosis and
monitoring of peripheral vascular disease, and a laser-based, long-term
hair removal system (the ThermoLase system). In December 1994, based on
data collected from clinical trials, the Company submitted a 510(k)
application to the FDA seeking clearance to commercially market and sell
services using the ThermoLase system. ThermoTrex's products are at
different stages of development and are subject to different levels of
regulatory approval. Because these projects are still under development, no
assurance can be given that the necessary approvals for any of the projects
will be obtained on a timely basis, or at all, or that any of them will
eventually result in commercially viable products.
Through Thermedics' Ramsey Technology subsidiary, which was acquired in
March 1994, the Company manufactures instruments that weigh and inspect
bulk materials for the mining and mineral processing industry, coal-fired
electric utilities, and construction-material suppliers. Ramsey also
manufactures weighing and metal-detection instruments for the food
processing and other packaged goods markets, including the pharmaceutical
industry.
Based on technology that has been used to develop instruments sold by the
Company for the detection of nitrogen-based compounds, the Company, through
a subsidiary of Thermedics, developed the EGIS(R) system and the Sentor(R)
system. The EGIS system is a highly sensitive chemical-detection instrument
for screening people, baggage, packages, freight, and electronic equipment,
such as personal computers, for the presence of a wide range of explosives,
including the plastic explosives that have proven difficult to detect using
conventional methods. The Sentor system is used by law enforcement
officials to detect the presence of cocaine and heroin. In 1992, Thermedics
introduced a high-speed product quality assurance system based on its
detection technology for use in bottling lines in the carbonated beverage
industry (the Alexus system). The Company believes that the technology
developed from this project may have applications in a range of
environments, particularly in the food and beverage industry, where the
ability to screen products during high-speed production, without
interruption, will enhance product quality and increase efficiency. In
1994, the Company introduced a new system to the bottled water industry.
The Company's Thermo Voltek Corp. subsidiary designs, develops, and
manufactures electronic test instruments that test electronic and
electrical systems and components for electromagnetic compatibility (EMC),
12PAGE
offers EMC-consulting and systems-integration services, acts as a
distributor of a broad range of EMC-testing products, and manufactures
power-conversion systems for use in telecommunications equipment. Thermo
Voltek also designs, manufactures, and markets high-voltage power
conversion systems, modulators, fast-response protection systems, and
related high-voltage equipment for industrial, medical, and environmental
processes, and defense and scientific research applications.
Publicly and Privately Held Subsidiaries
In 1983, the Company adopted a strategy of having certain subsidiaries sell
a minority interest in a public or private offering to outside investors.
An important goal of this strategy is to provide the entrepreneurial
atmosphere and focused performance incentives of a separate business. As of
March 3, 1995, the Company had 13 subsidiaries that have sold minority
equity interests, 11 of which are publicly traded and two of which are
privately held.
Thermedics Inc. develops, manufactures, and markets product quality
assurance systems, explosives- and drug-detection devices, and precision
weighing and inspection equipment, as well as biomaterials and other
biomedical products. Thermedics' products are included in the Company's
Biomedical Products and Advanced Technologies segments.
Thermo Cardiosystems Inc., a majority-owned subsidiary of Thermedics,
develops, manufactures, markets, and sells implantable pneumatic left
ventricular-assist systems designed to perform substantially all or
part of the pumping function of the left ventricle of the natural
heart for patients suffering from cardiovascular disease. Thermo
Cardiosystems also performs research and development on other versions
of its pneumatic system, as well as an electric version. Thermo
Cardiosystems' products are included in the Company's Biomedical
Products segment.
Thermo Voltek Corp., a majority-owned subsidiary of Thermedics,
designs, manufactures, and markets instruments that test electronic
systems and components for electromagnetic compatibility, and provides
related distribution and consulting services. Thermo Voltek also
designs and manufactures high-voltage power conversion systems for
research and commercial applications, and specialized power supplies
for telecommunications equipment. Thermo Voltek's products are
included in the Company's Advanced Technologies segment.
Thermo Instrument Systems Inc. develops, manufactures, and markets
analytical, monitoring, and process control instruments used to detect and
measure air pollution, radioactivity, complex chemical compounds, toxic
metals, and other elements in a broad range of liquids and solids as well
as control and monitor various industrial processes. Thermo Instrument's
products are included in the Company's Instruments segment.
ThermoSpectra Corporation, a majority-owned, privately held subsidiary
of Thermo Instrument, develops, manufactures, and markets precision
imaging, inspection, and measurement instrumentation that employ a
variety of energy sources or signals as well as high-speed data
acquisition and digital processing technologies. ThermoSpectra's
products are included in the Company's Instruments segment.
13PAGE
Thermo Process Systems Inc. provides a range of specialized environmental
services, including the engineering design and construction management of
water supply and wastewater treatment systems for both industry and
municipalities. Through its Thermo Terra Tech joint venture with Thermo
Instrument, Thermo Process provides environmental science and engineering
services, laboratory-based testing, and nuclear health and safety services.
Thermo Process also provides equipment and services for the automated
heat-treating of metal parts. Thermo Process' products and services are
included in the Company's Environmental Services and Process Equipment
segments.
Thermo Remediation Inc., a majority-owned subsidiary of Thermo
Process, operates a network of soil-remediation centers and provides
waste fluids-recycling and other specialized remediation services.
Thermo Remediation's services are included in the Company's
Environmental Services segment.
J. Amerika N.V., a majority-owned, privately held subsidiary of Thermo
Process, provides environmental services in the Netherlands, including
testing, removal, and installation of underground storage tanks, and
groundwater cleanup. J. Amerika's services are included in the
Company's Environmental Services segment.
Thermo Power Corporation manufactures, markets, and services industrial
refrigeration equipment; natural gas engines for vehicular and stationary
applications; natural gas-fueled cooling and cogeneration systems; and
marine engines. Thermo Power also conducts sponsored research and
development on advanced systems for clean-coal combustion and other
high-efficiency gas-fueled devices. Thermo Power's products are included in
the Company's Alternative-energy Systems segment.
ThermoTrex Corporation manufactures and markets mammography and needle-
biopsy systems for the early detection of breast cancer, and develops
advanced technologies that it is incorporating into commercial products for
the medical imaging, personal-care, and avionics industries. ThermoTrex's
products are included in the Company's Advanced Technologies and Biomedical
Products segments.
ThermoLase Corporation, a majority-owned subsidiary of ThermoTrex, is
developing a laser-based system for the long-term removal of unwanted
hair, and manufactures skin-care and other personal-care products sold
through salons, spas, and stores. ThermoLase's hair-removal system is
included in the Company's Advanced Technologies segment, and its
skin-care products are included in the Company's Biomedical Products
segment.
Thermo Fibertek Inc. develops, manufactures, and markets a range of
equipment and accessory products for the domestic and international paper
industry, including de-inking and stock-preparation equipment, and
water-management systems for paper recycling. Thermo Fibertek's products
are included in the Company's Process Equipment segment.
Thermo Ecotek Corporation develops and operates independent (nonutility)
power plants. Plants currently operated by the Company are owned by third
parties and leased on a long-term basis to the Company, or are owned by
subsidiaries or partnerships in which the Company has ownership interests.
Thermo Ecotek's operations are included in the Company's Alternative-energy
Systems segment.
14PAGE
The Company also has a number of wholly owned subsidiaries and divisions
that develop, manufacture, and market neurophysiology monitoring
instruments, blood-coagulation monitoring products and skin-incision
devices, electroplating and wastewater treatment lines, and steam turbines
and gas compressors, and provide services in metallurgical heat-treating
and specialty metals fabrication. In addition, a division of the Company
constructed and now operates a waste-recycling facility in San Diego
County, California.
(ii) New Products
The Company's business includes the development and introduction of new
products and may include entry into new business segments. The Company has
made no commitments to new products that require the investment of a
material amount of the Company's assets, nor does it have any definitive
plans to enter new business segments that would require such an investment
(see Section (xi) "Research and Development").
(iii) Raw Materials
Thermo Cardiosystems relies upon several custom-designed components and
materials supplied by other companies to manufacture its LVAS. In 1992,
several suppliers of such components and materials notified Thermo
Cardiosystems that they intended to exit the biomedical market. While the
Company believes that it will be able to develop new sources of, or
alternatives to, these materials and components, no assurance can be given
that the Company will develop such sources or alternatives in a timely
manner, or that the FDA will approve the use of any such alternative
materials or components.
Except as described above, in the opinion of management, the Company has a
readily available supply of raw materials for all of its significant
products from various sources and does not anticipate any difficulties in
obtaining the raw materials essential to its business.
(iv) Patents, Licenses, and Trademarks
The Company considers patents to be important in the present operation of
its business. However, the Company does not consider any patent, or related
group of patents, to be of such importance that its expiration or
termination would materially affect the Company's business taken as a
whole. The Company seeks patent protection for inventions and developments
made by its personnel and incorporated into its products or otherwise
falling within its fields of interest. Patent rights resulting from work
sponsored by outside parties do not always accrue exclusively to the
Company and may be limited by agreements or contracts.
The Company protects some of its technology as trade secrets and, where
appropriate, uses trademarks or registers its products. It also enters into
license agreements with others to grant and/or receive rights to patents
and know-how.
15PAGE
(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
No single customer accounted for more than 10% of the Company's total
revenues in any of the past three years. The Advanced Technologies segment
derived approximately 13% of its revenues in 1994 from contracts with
various agencies of the U.S. government and approximately 23% of its
revenues in 1994 from one customer for a process detection instrument. In
connection with the development of power plants, the Company typically
enters into long-term power supply contracts with a single customer for the
sale of power generated by each plant. Although the Alternative-energy
Systems segment is, therefore, dependent upon a small number of customers,
the Company believes that the nature of its customers (typically utilities)
and the long-term nature of these contracts significantly reduce the risk
associated with a small customer base.
(viii) Backlog
The Company's backlog of firm orders at year-end 1994 and 1993 was as
follows:
(In thousands) 1994 1993
-------------------------------------------------------------------------
Instruments $139,600 $115,600
Alternative-energy Systems 404,100 395,900
Process Equipment 199,000 36,200
Biomedical Products 37,300 26,800
Environmental Services 46,700 39,700
Advanced Technologies 44,400 29,100
-------- --------
$871,100 $643,300
======== ========
Alternative-energy Systems segment backlog includes $295 million at
year-end 1994 for revenues to be earned through 2017 from the operation of
the Recycling Facility, construction of which was completed in early 1994
(see "Alternative-energy Systems" under section (c), "Description of
Business").
Backlog includes the uncompleted portion of research and development
contracts and the uncompleted portion of certain equipment contracts that
are accounted for using the percentage-of-completion method. The Company
believes approximately 93% of the 1994 backlog, excluding backlog relating
to the Recycling Facility, will be filled during fiscal 1995. The Company
believes that approximately $13 million of the backlog relating to the
Recycling Facility will be filled in fiscal 1995.
16PAGE
(ix) Government Contracts
Approximately 2% of the Company's total revenues in fiscal 1994 were
derived from contracts or subcontracts with the federal government, which
are subject to renegotiation of profits or termination. The Company does
not have any knowledge of threatened or pending renegotiation or
termination of any material contract or subcontract.
(x) Competition
The Company is engaged in many highly competitive industries. The nature of
the competition in each of the Company's markets is described below:
Instruments
The Company's instruments business generally competes on the basis of
technical advances that result in new products and improved price-
performance ratios, reputation among customers as a quality leader for
products and services, and active research and application-development
programs. To a lesser extent, the Company competes on the basis of price.
The Company believes it is among the principal manufacturers specializing
in analytical instrumentation, although it faces significant competition
from other companies, certain of which are larger than the Company, and
technologies in most of its product lines. The Company believes it is a
leading supplier of mass spectrometers, FT-IR spectrometers, FT-IR and
FT-Raman microscopes, optical plasma-emission spectrometers, and a major
supplier of atomic absorption spectrometers. In liquid chromatography, the
Company believes its competitors include several large companies and
numerous specialty manufacturers. In its remaining analytical instrument
product lines, the Company believes its competitors are mainly smaller,
specialized firms.
The Company is a leading manufacturer of ambient air monitoring instruments
and a major manufacturer of source monitoring and worker-safety monitoring
instruments. Some engineering companies compete for large ambient air
monitoring installations, but they do not manufacture the individual
instruments that form a major part of the system, therefore, they will
often buy these from the Company on an OEM basis.
The Company has a relatively small presence within the large and varied
process control marketplace, which is extremely fragmented and comprises
several large companies and numerous smaller companies.
Alternative-energy Systems
The worldwide independent power market consists of numerous companies,
ranging from small startups to multinational industrial companies. In
addition, a number of regulated utilities have created subsidiaries that
compete as nonutility generators. Nonutility generators often specialize in
market "niches," such as a specific technology or fuel (for example,
gas-fired cogeneration, refuse-to-energy, hydropower, geothermal, wind,
solar, wood or coal) or a specific region of the country where they believe
they have a market advantage. However, many nonutility generators,
including the Company, seek to develop projects on a best-available-fuel
basis. The Company competes primarily on the basis of project experience,
technical expertise, capital resources, and power pricing.
The Company's sale of industrial refrigeration systems is subject to
intense competition. The industrial refrigeration market is mature, highly
17PAGE
fragmented, and extremely dependent on close customer contacts. Major
industrial refrigeration companies, of which the Company's FES division is
one, account for approximately one-half of worldwide sales, with the
balance generated by many smaller companies. The Company competes
principally on the basis of its advanced control systems and overall
quality, reliability, service, and price. The Company believes it is a
leader in remanufactured refrigeration equipment. NuTemp's rental services
business has one large competitor that supplies rental equipment. The
Company competes in this market based on price, delivery time, and
customized equipment.
The Company's sale of packaged cogeneration systems is subject to intense
competition, both direct and indirect. Direct competitors consist of
companies that sell cogeneration products resembling those sold by the
Company. In addition, electric utilities' pricing programs provide
competition for the Company's cogeneration products. Indirect competitors
include manufacturers of conventional water heaters, air conditioners, and
electric generator sets, since the economic benefits of the Company's
cogeneration and cooling systems depend on the cost of conventional energy
systems. The Company believes it competes in the sale of its systems on the
basis of several factors, including product quality and reliability,
operational savings, ease of installation, service, and price.
As the alternative-fuel engine market becomes fully developed, the Company
anticipates that competition, specifically in the market for natural gas
engines for vehicles, will be intense, and potential competitors may
include major automotive and natural gas companies and other companies that
have substantially greater financial resources than those of the Company.
The Company has experienced intense competition in the marine engine
business in recent years, primarily from the vertical integration of boat
and engine manufacturers that has led to the acquisition of some of its
former customers by competing engine manufacturers. Competition is
primarily on the basis of quality, reliability, and service.
Process Equipment
The Company faces significant competition in the markets for paper-
recycling, water handling and papermachine accessories equipment, and
competes in these markets primarily on the basis of quality, service,
technical expertise, and product innovation. The Company is a leading
supplier of accessory equipment for papermaking machines, and competes in
this market primarily on the basis of service, technical expertise, and
performance.
Although the market for metallurgical processing systems is subject to
intense competition worldwide, competition for particular projects is
typically limited to only a few companies. The Company competes on the
basis of several factors, including technical performance, product quality
and reliability, timely delivery, and price.
Biomedical Products
Competition in the markets for most of the Company's biomedical products,
including those manufactured by Thermo Cardiosystems, Lorad, Nicolet
Biomedical, and ITC, is based to a large extent upon technical performance.
CBI competes with a number of small manufacturers and divisions of larger
18PAGE
companies primarily on the basis of relative price and quality of its
personal-care products.
The Company is aware of one other company that has submitted a PMA
application with the FDA for an implantable LVAS. The Company is unaware
whether this PMA application has been accepted for filing by the FDA. Also,
the Company is aware of one other company that has received a favorable
recommendation by the FDA Advisory Panel on Circulatory System Devices for
its cardiac-assist device. This is an external device that is positioned on
the outside of the patients' chest and is intended for short-term use in
the hospital environment. The Company is also aware that a total artificial
heart is currently undergoing clinical trials. The requirement of obtaining
FDA approval for commercial sale of an LVAS is a significant barrier to
entry into the U.S. market for these devices. There can be no assurance,
however, that FDA regulations will not change in the future, reducing the
time and testing required for others to obtain FDA approval for commercial
sales. In addition, other research groups and companies are developing
cardiac-assist systems using alternative technologies or concepts, one or
more of which might prove functionally equivalent to or more suitable than
the Company's systems. Among products that have been approved for
commercial sale, the Company competes primarily on the basis of
performance, service capability, reimbursement status, and price.
Lorad and General Electric Company each have approximately 30% of the U.S.
X-ray mammography market. The balance of the market is divided among
approximately 10 other companies. The Company competes in this market
principally on the basis of technological advances and technical service
support and, to a lesser extent, price.
Environmental Services
The Company competes in the market for soil-remediation services based on
its ability to offer customers superior protection from environmental
liabilities using a national network of cleanup facilities. However, the
Company faces competition in local markets from landfills, other treatment
technologies, and from companies competing with similar technologies, which
limits the prices that can be charged by the Company. Pricing is therefore
a major competitive factor for the Company.
The Company's metallurgical services business competes in specialty
machining services. Competition is based principally on services provided,
turnaround time, and price.
Hundreds of independent analytical testing laboratories and consulting
firms compete for environmental services business nationwide. Many of these
firms use equipment and processes similar to those of the Company.
Competition is based not only on price, but also on reputation for
accuracy, quality, and the ability to respond rapidly to customer
requirements. In addition, many industrial companies have their own
in-house analytical testing capabilities. The Company believes that its
competitive strength lies in certain niche markets within which the Company
is recognized for its expertise.
Advanced Technologies
In its contract research and development business, the Company not only
competes with other companies and institutions that perform similar
services, but must also rely on the ability of government agencies and
19PAGE
other clients to obtain allocations of research and development monies to
fund contracts with the Company. The Company competes for its research and
development programs principally on the basis of technical 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 commercializa-
tion, competition is expected to intensify.
The Company believes that its Ramsey subsidiary is the world's leading
supplier of precision weighing and inspection systems for bulk materials
and competes with approximately 15 regional companies of significant size
on the basis of performance, service, and price. Ramsey is also one of the
five leading world suppliers of product quality assurance systems for
packaged products. Ramsey's competitors in this market differ from those in
the bulk materials market and the Company competes on the basis of
performance, service and, to a lesser extent, price.
The Company's product quality assurance systems compete with chemical-
detection systems manufactured by several companies and with other
technologies and processes for product quality assurance. Competition in
the markets for all of the Company's detection products is based primarily
on performance, service and price.
There are a number of competing technologies for instruments that detect
explosives and narcotics, including makers of other chemical-detection
instruments as well as enhanced X-ray detectors. Since the Federal Aviation
Administration (FAA) has not required that U.S. airports and airlines buy
advanced explosives-detection equipment, the Company has not sold any EGIS
systems to U.S. airlines. The Company believes that companies whose devices
are required by the FAA will have a substantial competitive advantage in
the United States.
The Company is a leading supplier of pulsed electromagnetic interference
testing equipment in the U.S., and believes that it is also among the
leading suppliers in Europe and the Pacific Rim, other than Japan. The
Company competes in this market primarily on the basis of performance,
technical expertise, and reputation.
The Company estimates that there are approximately 20 companies that
independently manufacture and market high-voltage power supply systems of
the general type manufactured and marketed by Thermo Voltek. Thermo Voltek
competes for both contracts and commercial sales primarily on the basis of
technical expertise, product performance, and reputation.
(xi) Research and Development
During 1994, 1993, and 1992, the Company expended $99,777,000, $79,378,000,
and $58,101,000, respectively, on research and development. Of these
amounts, $20,925,000, $20,435,000, and $19,426,000 were sponsored by
customers and $78,852,000, $58,943,000, and $38,675,000 were
Company-sponsored. Approximately 807 professional employees were engaged
full-time in research and development activities at December 31, 1994.
20PAGE
(xii) Environmental Protection Regulations
The Company believes that compliance with federal, state, and local
environmental protection regulations will not have a material adverse
effect on its capital expenditures, earnings, or competitive position.
(xiii) Number of Employees
At December 31, 1994, the Company employed 10,234 persons.
(d) Financial Information about Exports by Domestic Operations and about
Foreign Operations
Financial information about exports by domestic operations and about
foreign operations is summarized in Note 14 to Consolidated Financial
Statements in the Registrant's 1994 Annual Report to Shareholders and is
incorporated herein by reference.
(e) Executive Officers of the Registrant
Present Title (Year First
Name Age Became Executive Officer)
--------------------------------------------------------------------------
George N. Hatsopoulos (1) 68 Chairman of the Board, President, Chief
Executive Officer, and Director (1956)
John N. Hatsopoulos (1) 60 Executive Vice President and Chief
Financial Officer (1968)
Robert C. Howard 64 Executive Vice President (1968)
Peter G. Pantazelos 64 Executive Vice President (1968)
Arvin H. Smith 65 Executive Vice President (1983)
William A. Rainville 53 Senior Vice President (1993)
Paul F. Kelleher 52 Vice President, Finance (1982)
(1) George N. Hatsopoulos and John N. Hatsopoulos are brothers.
Each executive officer serves until his successor is chosen or appointed
and qualified or until earlier resignation, death, or removal. All
executive officers have held comparable positions with the Company for at
least the last five years.
Item 2. Properties
The location and general character of the Company's principal properties by
industry segment as of December 31, 1994, are as follows:
Instruments
The Company owns approximately 1,203,000 square feet of office,
engineering, laboratory, and production space, principally in California,
Colorado, Florida, New Mexico, Wisconsin, Germany, and England, and leases
approximately 957,000 square feet of office, engineering, laboratory, and
production space principally in California, Connecticut, Massachusetts,
Texas, Wisconsin, Germany, and Japan, under leases expiring from 1995 to
2017.
21PAGE
Alternative-energy Systems
The Company owns approximately 298,000 square feet of office, engineering,
and production space in Pennsylvania and England, and leases approximately
397,000 square feet of office, engineering, laboratory, and production
space principally in Illinois, Massachusetts and Michigan, under leases
expiring from 1995 to 2017.
The Company operates four independent power plants in California, Maine,
and New Hampshire, under leases expiring from 2003 to 2009. The Company
owns three independent power plants in New Hampshire and California and a
waste-recycling facility in California.
Process Equipment
The Company owns approximately 1,234,000 square feet of office, laboratory,
and production space, principally in Connecticut, Massachusetts, New York,
Canada, England, France, and Mexico, and leases approximately 402,000
square feet of office, engineering, and production space principally in
Georgia, Michigan, and Wisconsin, under leases expiring from 1996 to 2004.
Biomedical Products
The Company owns approximately 97,000 square feet of office and production
space in Connecticut and New Jersey, and leases approximately 484,000
square feet of office, engineering, laboratory, and production space in
Illinois, Massachusetts, New Jersey, and Texas, under leases expiring from
1995 to 2009.
Environmental Services
The Company owns approximately 4,512,000 square feet of office, laboratory,
and production space, principally in California, Florida, Maryland,
Minnesota, Oregon, South Carolina, and the Netherlands, and leases
approximately 1,487,000 square feet of office, engineering, laboratory, and
production space principally in Arizona, California, Massachusetts, New
Jersey, New Mexico, South Carolina, Virginia, and Washington under leases
expiring from 1995 to 2008.
Advanced Technologies and Corporate Headquarters
The Company owns approximately 136,000 square feet of office space in
Massachusetts and New York and leases approximately 489,000 square feet of
office, engineering, and laboratory space principally in California,
Massachusetts, Minnesota, England, Italy, and the Netherlands, under leases
expiring from 1995 to 2003.
The Company believes that its facilities are in good condition and are
suitable and adequate to meet its current needs, and that suitable
replacements are available on commercially reasonable terms for any leases
that expire in 1995 in the event that the Company is unable to renew such
leases on reasonable terms.
Item 3. Legal Proceedings
The Company participates in the operation of the Dade County Downtown
Government Center cogeneration facility in Miami, Florida, through a 50/50
joint venture of subsidiaries of the Company and Rolls-Royce, Inc. This
facility and the joint venture are involved in regulatory and other legal
22PAGE
proceedings at the Federal Energy Regulatory Commission, the Florida Public
Service Commission and in court. See the information pertaining to this
matter in Note 7 to Consolidated Financial Statements, and under the
caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations," in the Registrant's 1994 Annual Report to
Shareholders (filed as Exhibit 13 to this Annual Report on Form 10-K),
which information is incorporated herein by reference.
Certain subsidiaries of the Company have been notified that the U.S.
Environmental Protection Agency (EPA) has determined that a release or a
substantial threat of a release of a hazardous substance, as defined in the
Comprehensive Environmental Response Compensation and Liability Act of 1980
(CERCLA or the Superfund law), occurred at sites to which chemical or other
wastes generated by the manufacturing operations of these companies may
have been sent. These notifications generally also allege that these
companies may be potentially responsible parties with respect to the
remedial actions needed to control or clean up any such releases. Under
CERCLA, responsible parties can include current and previous owners of the
site, generators of hazardous substances disposed of at the site, and
transporters of hazardous substances to the site. Each responsible party
can be jointly and severally liable, without regard to fault or negligence,
for all costs associated with site remediation. In each instance the
Company believes that its subsidiary is one of several companies that
received such notification and who may likewise be held liable for any such
remedial costs.
The Company is also involved in situations under state environmental laws
with respect to certain other sites where remediation may be required. The
Company is conducting investigative or remediation activities at these
sites pursuant to arrangements with state environmental agencies.
The Company evaluates its potential liability as a responsible party for
these environmental matters on an ongoing basis subject to factors such as
the estimated remediation costs, the nature and duration of the Company's
involvement with the site, the financial strength of other potentially
responsible parties, and the availability of indemnification from previous
owners of acquired businesses. Estimated liabilities are accrued in
accordance with Statement of Financial Accounting Standards No. 5,
"Accounting for Contingencies." To date, the Company has not incurred any
significant liability with respect to any of these sites and anticipates
that future liabilities related to sites where the Company is currently a
potentially responsible party or is otherwise conducting investigative or
remediation activities, will not have a material adverse effect on its
business, results of operations, or financial position.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
23PAGE
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, $1.00 par value, and related matters, is included under the
sections labeled "Common Stock Market Information" and "Dividend Policy" in
the Registrant's 1994 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
"Ten Year Financial Summary" and "Dividend Policy" in the Registrant's 1994
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 1994 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 December 31, 1994,
are included in the Registrant's 1994 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.
24PAGE
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.
25PAGE
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a), (d) Financial Statements and Schedules
(1) The financial statements set forth in the list below are
filed as part of this Report.
(2) The 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 Schedule included 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
During the Company's fiscal quarter ended December 31, 1994, the Company
was not required to file, and did not file, any Current Report on Form 8-K.
On March 6, 1995, the Company filed a Current Report on Form 8-K pertaining
to Thermo Instruments' pending acquisition of Fisons plc.
(c) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
26PAGE
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 7, 1995
THERMO ELECTRON CORPORATION
By:George N. Hatsopoulos
George N. Hatsopoulos
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, as of March 7, 1995.
Signature Title
By:George N. Hatsopoulos President, Chief Executive Officer,
George N. Hatsopoulos Chairman of the Board and Director
By:John N. Hatsopoulos Executive Vice President and Chief
John N. Hatsopoulos Financial Officer
By:Paul F. Kelleher Vice President, Finance
Paul F. Kelleher (Chief Accounting officer)
By:John M. Albertine Director
John M. Albertine
By: Director
Peter O. Crisp
By:Elias P. Gyftopoulos Director
Elias P. Gyftopoulos
By:Frank Jungers Director
Frank Jungers
By:Robert A. McCabe Director
Robert A. McCabe
By:Frank E. Morris Director
Frank E. Morris
By:Donald E. Noble Director
Donald E. Noble
By:Hutham S. Olayan Director
Hutham S. Olayan
By:Roger D. Wellington Director
Roger D. Wellington
27PAGE
Report of Independent Public Accountants
To the Shareholders and Board of Directors of
Thermo Electron Corporation:
We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements included in Thermo Electron
Corporation's Annual Report to Shareholders incorporated by reference in
this Form 10-K, and have issued our report thereon dated February 10, 1995
(except with respect to the matters discussed in Note 15 as to which the
date is March 1, 1995). 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 26 is the responsibility of the Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This schedule has been subjected to the auditing procedures
applied in the audits of the basic consolidated financial statements and,
in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated
financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
February 10, 1995
28PAGE
SCHEDULE II
Thermo Electron Corporation
Valuation and Qualifying Accounts
(In thousands)
Year Ended December 31, 1994
Balance, Charged
Begin- to Costs Accounts Accounts Balance,
ning of and Recov- Written End of
Year Expenses Other(a) ered Off Year
------------------------------------------------------------------------
Allowance for
Doubtful
Accounts $14,129 $ 4,225 $ 7,646 $ 268 $(4,649) $21,619
========================================================================
Year Ended January 1, 1994
Balance, Charged
Begin- to Costs Accounts Accounts Balance,
ning of and Recov- Written End of
Year Expenses Other(a) ered Off Year
------------------------------------------------------------------------
Allowance for
Doubtful
Accounts $11,341 $ 2,675 $ 1,532 $ 1,961 $(3,380) $14,129
========================================================================
Year Ended January 2, 1993
Balance, Charged
Begin- to Costs Accounts Accounts Balance,
ning of and Recov- Written End of
Year Expenses Other(a) ered Off Year
------------------------------------------------------------------------
Allowance for
Doubtful
Accounts $10,865 $ 2,021 $ 1,760 $ 144 $(3,449) $11,341
========================================================================
(a) Allowances of businesses acquired during the year as described in Note
3 to Consolidated Financial Statements in the Registrant's 1994 Annual
Report to Shareholders.
29PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
2.1 Asset and Stock Purchase Agreement among the
Registrant, Thermo Instrument Corporation and Fisons
plc dated March 1, 1995 (filed as Exhibit 2.3 to Thermo
Instrument's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference). Pursuant to Item
601(b)(2) of Regulation S-K, schedules to this
Agreement have been omitted. The Company hereby
undertakes to furnish supplementally a copy of such
schedules to the Commission upon request.
3.1 Restated Certificate of Incorporation of the
Registrant, as amended (filed as Exhibit 3(i) to the
Registrant's Quarterly Report on Form 10-Q for the
quarter ended July 2, 1994 [File No. 1-8002] and
incorporated herein by reference).
3.2 By-laws of the Registrant, as amended (filed as Exhibit
3.2 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended January 1, 1994 [File No. 1-8002]
and incorporated herein by reference).
4.1 Fiscal Agency Agreement dated July 29, 1992 between the
Registrant and Chemical Bank, pertaining to the
Registrant's 4 5/8% Senior Convertible Debentures due
1997 (filed as Exhibit 19 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 27, 1992
[File No. 1-8002] and incorporated herein by
reference).
Fiscal Agency Agreement dated as of April 15, 1994
between the Registrant and Chemical Bank, pertaining to
the Registrant's 5% Senior Convertible Debentures due
2001 (filed as Exhibit 4.1 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended
April 2, 1994 [File No. 1-8002] and incorporated herein
by reference).
The Registrant agrees, pursuant to Item
601(b)(4)(iii)(A) of Regulation S-K, to furnish to the
Commission upon request, a copy of each instrument with
respect to other long-term debt of the Registrant or
its consolidated subsidiaries.
4.2 Rights Agreement dated as of May 4, 1988 between the
Registrant and The First National Bank of Boston, which
includes as Exhibit A the Form of Certificate of
Designations, as Exhibit B the Form of Rights
Certificate, and as Exhibit C the Summary of Rights to
Purchase Preferred Stock (filed as Exhibit 1 to the
Registrant's Registration Statement on Form 8-A,
declared effective by the Commission on June 25, 1988
[File No. 1-8002] and incorporated herein by
reference).
30PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.1 Thermo Electron Corporate Charter as amended and
restated effective January 3, 1993 (filed as
Exhibit 10.1 to the Registrant's Annual Report on Form
10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by
reference).
10.2 Form of Severance Benefit Agreement with officers
(filed as Exhibit 10.15 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December
29, 1990 [File No. 1-8002] and incorporated herein by
reference).
10.3 Form of Indemnification Agreement with directors and
officers (filed as Exhibit 10.16 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 29, 1990 [File No. 1-8002] and incorporated
herein by reference).
10.4 Loan and Reimbursement Agreement dated as of December
1, 1991 among North County Resource Recovery
Associates; Union Bank of Switzerland; National
Westminster Bank PLC and Banque Paribas, New York
Branch, as lead managers; Credit Local de France as
co-lead manager; and Union Bank of Switzerland as
issuing bank and as agent (filed as Exhibit 10.39 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference).
10.5 Amended and Restated Reimbursement Agreement dated as
of December 31, 1993 among Chemical Trust Company of
California as Owner Trustee; Delano Energy Company
Inc.; ABN AMRO Bank N.V., Boston Branch, for itself and
as Agent; The First National Bank of Boston, as
Co-agent; Barclays Bank PLC, as Co-agent; Societe
Generale, as Co-agent; and BayBank, as Lead Manager
(filed as Exhibit 10.5 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January
1, 1994 [File No. 1-8002] and incorporated herein by
reference).
10.6 Amended and Restated Participation Agreement dated as
of December 31, 1991 among Delano Energy Company Inc.;
Thermo Energy Systems Corporation; Chemical Trust
Company of California, as Owner Trustee; ABN AMRO Bank
N.V., Boston Branch, as Co-agent; Bank of Montreal, as
Co-agent; Barclays Bank PLC, as Co-agent; Society
Generale, as Co-agent; BayBank, as Lead Manager; and
ABN AMRO Bank N.V., Cayman Island Branch, and joined in
by the Registrant (filed as Exhibit 10.6 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-8002].
31PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.7 Turnkey Engineering, Procurement, Construction and
Initial Operation Agreement for a deinking pulp
facility dated as of November 1, 1994 between the
Registrant, as contractor, and Great Lakes Pulp
Partners I, L.P., as owner. Pursuant to Item 601(b)(2)
of Regulation S-K, schedules to this Agreement have
been omitted. The Company hereby undertakes to furnish
supplementally a copy of such schedules to the
Commission upon request.
10.8 - 10.20 Reserved.
10.21 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 4(d) to the Registrant's Registration Statement
on Form S-8 [Reg. No. 33-8993] 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 6,023,437 shares,
after adjustment to reflect share increases approved in
1984 and 1986, and share decrease approved in 1989, and
3-for-2 stock splits effected in October 1986 and
October 1993).
10.22 Nonqualified Stock Option Plan of the Registrant (filed
as Exhibit 4(e) to the Registrant's Registration
Statement on Form S-8 [Reg. No. 33-8993] and
incorporated herein by reference). (Plan amended in
1984 to extend expiration date to December 14, 1994;
maximum number of shares issuable in the aggregate
under this plan and the Registrant's Incentive Stock
Option Plan is 6,023,437 shares, after adjustment to
reflect share increases approved in 1984 and 1986, and
share decrease approved in 1989, and 3-for-2 stock
splits effected in October 1986 and October 1993).
10.23 Deferred Compensation for Directors of the Registrant
(filed as Exhibit 10.5 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January
3, 1987 [File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable is
301,875 shares, after adjustment to reflect share
increases approved in 1986 and 1992 and 3-for-2 stock
splits effected in October 1986 and October 1993).
10.24 Equity Incentive Plan of the Registrant (filed as
Exhibit 10.1 to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended July 2, 1994 [File No.
1-8002] and incorporated herein by reference). (Plan
amended in 1989 to restrict exercise price for SEC
reporting persons to not less than 50% of fair market
value or par value; maximum number of shares issuable
is 4,700,000 shares, after adjustment to reflect
3-for-2 stock split effected in October 1993 and share
increase approved in 1994).
32PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.25 Amended and Restated Directors' Stock Option Plan of
the Registrant.
10.26 Thermo Electron Corporation - Thermedics Inc.
Nonqualified Stock Option Plan (filed as Exhibit 4 to a
Registration Statement on Form S-8 of Thermedics [Reg.
No. 2-93747] and incorporated herein by reference).
(Maximum number of shares issuable is 450,000 shares,
after adjustment to reflect share increase approved in
1988, 5-for-4 stock split effected in January 1985,
4-for-3 stock split effected in September 1985, and
3-for-2 stock splits effected in October 1986 and
November 1993).
10.27 Thermo Electron Corporation - Thermo Instrument Systems
Inc. (formerly Thermo Environmental Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 4(c)
to a Registration Statement on Form S-8 of Thermo
Instrument [Reg. No. 33-8034] and incorporated herein
by reference). (Maximum number of shares issuable is
225,000 shares, after adjustment to reflect 3-for-2
stock split effected in July 1993).
10.28 Thermo Electron Corporation - Thermo Instrument Systems
Inc. Nonqualified Stock Option Plan (filed as Exhibit
10.12 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 3, 1987 [File No.
1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 320,152 shares, after
adjustment to reflect share increase approved in 1988
and 3-for-2 stock splits effected in January 1988 and
July 1993).
10.29 Thermo Electron Corporation - Thermo Process Systems
Inc. Nonqualified Stock Option Plan (filed as Exhibit
10.13 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 3, 1987 [File No.
1-8002] and incorporated herein by reference). (Maximum
number of shares issuable is 108,000 shares, after
adjustment to reflect 6-for-5 stock splits effected in
July 1988 and March 1989, and 3-for-2 stock split
effected in September 1989).
10.30 Thermo Electron Corporation - Thermo Power Corporation
(formerly Tecogen Inc.) Nonqualified Stock Option Plan
(filed as Exhibit 10.14 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended January
3, 1987 [File No. 1-8002] and incorporated herein by
reference).
33PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.31 Thermo Electron Corporation - Thermo Cardiosystems Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.11
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 130,500 shares, after adjustment
to reflect share increases approved in 1990 and 1992,
3-for-2 stock split effected in January 1990, 5-for-4
stock split effected in May 1990, and 2-for-1 stock
split effected in November 1993).
10.32 Thermo Electron Corporation - Thermo Ecotek Corporation
(formerly Thermo Energy Systems Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.12
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference).
10.33 Thermo Electron Corporation - ThermoTrex Corporation
(formerly Thermo Electron Technologies Corporation)
Nonqualified Stock Option Plan (filed as Exhibit 10.13
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 29, 1990 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 180,000 shares, after adjustment
to reflect 3-for-2 stock split effected in
October 1993).
10.34 Thermo Electron Corporation - Thermo Fibertek Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.14
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 28, 1991 [File No. 1-8002]
and incorporated herein by reference). (Maximum number
of shares issuable is 400,000 shares, after adjustment
to reflect 2-for-1 stock split effected in September
1992).
10.35 Thermo Electron Corporation - Thermo Voltek Corp.
(formerly Universal Voltronics Corp.) Nonqualified
Stock Option Plan (filed as Exhibit 10.17 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference). (Maximum number of
shares issuable is 7,500 shares, after adjustment to
reflect 3-for-2 stock split effected in November 1993).
34PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.36 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Incentive Stock Option Plan (filed
as Exhibit 10.18 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Ecotek
Nonqualified Stock Option Plan is 900,000 shares, after
adjustment to reflect share increase approved in
December 1993).
10.37 Thermo Ecotek Corporation (formerly Energy Systems
Corporation) Nonqualified Stock Option Plan (filed as
Exhibit 10.19 to the Registrant's Annual Report on
Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-8002] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Ecotek
Incentive Stock Option Plan is 900,000 shares, after
adjustment to reflect share increase approved in
December 1993).
10.38 Thermo Ecotek Corporation (formerly Thermo Energy
Systems Corporation) Equity Incentive Plan (filed as
Exhibit 10.39 to Thermo Instrument's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994
[File No. 1-9786] and incorporated herein by
reference).
10.39 Thermedics Inc. Nonqualified Stock Option Plan (filed
as Exhibit 10(e) to Thermedics' Registration Statement
on Form S-1 [Reg. No. 33-84380] and incorporated herein
by reference). (Maximum number of shares issuable in
the aggregate under this plan and the Thermedics
Incentive Stock Option Plan is 1,931,923 shares, after
adjustment to reflect share increases approved in 1986
and 1992, 5-for-4 stock split effected in January 1985,
4-for-3 stock split effected in September 1985, and
3-for-2 stock splits effected in October 1986 and
November 1993).
10.40 Thermedics Inc. Incentive Stock Option Plan (filed as
Exhibit 10(d) to Thermedics' Registration Statement on
Form S-1 [Reg. No. 33-84380] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermedics
Nonqualified Stock Option Plan is 1,931,923 shares,
after adjustment to reflect share increases approved in
1986 and 1992, 5-for-4 stock split effected in January
1985, 4-for-3 stock split effected in September 1985,
and 3-for-2 stock splits effected in October 1986 and
November 1993).
35PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.41 Thermedics Inc. Equity Incentive Plan (filed as
Appendix A to the Proxy Statement dated May 10, 1993 of
Thermedics [File No. 1-9567] and incorporated herein by
reference). (Maximum number of shares issuable is
1,500,000 shares, after adjustment to reflect 3-for-2
stock split effected in November 1993).
10.42 Thermedics Inc. - Thermedics Detection Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10.20
to the Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1993 [File No. 1-8002] and
incorporated herein by reference).
10.43 Thermo Cardiosystems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(f) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Cardiosystems Nonqualified Stock Option Plan
is 1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected
in January 1990, 5-for-4 stock split effected in May
1990, and 2-for-1 stock split effected in November
1993).
10.44 Thermo Cardiosystems Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(g) to Thermo Cardiosystems'
Registration Statement on Form S-1 [Reg. No. 33-25144]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Cardiosystems Incentive Stock Option Plan is
1,143,750 shares, after adjustment to reflect share
increase approved in 1992, 3-for-2 stock split effected
in January 1990, 5-for-4 stock split effected in May
1990, and 2-for-1 stock split effected in November
1993).
10.45 Thermo Cardiosystems Inc. Equity Incentive Plan (filed
as Exhibit 10.46 to Thermo Instrument's Annual Report
on Form 10-K for the fiscal year ended December 31,
1994 [File No. 1-9786] and incorporated herein by
reference).
10.46 Thermo Voltek Corp. (formerly Universal Voltronics
Corp.) 1985 Stock Option Plan (filed as Exhibit 10.14
to Thermo Voltek's Annual Report on Form 10-K for the
fiscal year ended June 30, 1985 [File No. 0-8245] and
incorporated herein by reference). (Maximum number of
shares issuable is 200,000 shares, after adjustment to
reflect 1-for-3 reverse stock split effected in
November 1992 and 3-for-2 stock split effected in
November 1993).
36PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.47 Thermo Voltek Corp. (formerly Universal Voltronics
Corp.) 1990 Stock Option Plan (filed as Exhibit 10.2 to
Thermo Voltek's Annual Report on Form 10-K for the
fiscal year ended June 30, 1990 [File No. 1-10574] and
incorporated herein by reference). (Maximum number of
shares issuable is 400,000 shares, after adjustment to
reflect share increase in 1993, 1-for-3 reverse stock
split effected in November 1992, 3-for-2 stock split
effected in November 1993, and share increase approved
in 1994).
10.48 Thermo Voltek Corp. Equity Incentive Plan (filed as
Exhibit 10.49 to Thermo Instrument's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994
[File No. 1-9786] and incorporated herein by
reference).
10.49 Thermo Instrument Systems Inc. Incentive Stock Option
Plan (filed as Exhibit 10(c) to Thermo Instrument's
Registration Statement on Form S-1 [Reg. No. 33-6762]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument Nonqualified Stock Option Plan is
1,500,000 shares, after adjustment to reflect share
increase approved in 1990 and 3-for-2 stock splits
effected in January 1988 and July 1993).
10.50 Thermo Instrument Systems Inc. Nonqualified Stock
Option Plan (filed as Exhibit 10(d) to Thermo
Instrument's Registration Statement on Form S-1 [Reg.
No. 33-6762] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate
under this plan and the Thermo Instrument Incentive
Stock Option Plan is 1,500,000 shares, after adjustment
to reflect share increase approved in 1990 and 3-for-2
stock splits effected in January 1988 and July 1993).
10.51 Thermo Instrument Systems Inc. Equity Incentive Plan
(filed as Appendix A to the Proxy Statement dated April
27, 1993 of Thermo Instrument [File No. 1-9786] and
incorporated herein by reference). (Maximum number of
shares issuable is 2,150,000 shares, after adjustment
to reflect share increase approved in December 1993 and
3-for-2 stock split effected in July 1993).
10.52 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(d) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument (formerly Thermo Environmental)
Nonqualified Stock Option Plan is 618,750 shares, after
adjustment to reflect share increase approved in 1987
and 3-for-2 stock split effected in July 1993).
37PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.53 Thermo Instrument Systems Inc. (formerly Thermo
Environmental Corporation) Nonqualified Stock Option
Plan (filed as Exhibit 10(e) to Thermo Environmental's
Registration Statement on Form S-1 [Reg. No. 33-329]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Instrument (formerly Thermo Environmental)
Incentive Stock Option Plan is 618,750 shares, after
adjustment to reflect share increase approved in 1987
and 3-for-2 stock split effected in July 1993).
10.54 Thermo Instrument Systems Inc. - ThermoSpectra Corporation
Nonqualified Stock Option Plan (filed as Exhibit 10.51 to
Thermo Instrument's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 [File No. 1-9786] and
incorporated herein by reference).
10.55 ThermoSpectra Corporation Equity Incentive Plan (filed as
Exhibit 10.52 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
10.56 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Incentive Stock Option Plan
(filed as Exhibit 10(h) to ThermoTrex'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 ThermoTrex 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).
10.57 ThermoTrex Corporation (formerly Thermo Electron
Technologies Corporation) Nonqualified Stock Option
Plan (filed as Exhibit 10(i) to ThermoTrex'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 ThermoTrex 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).
10.58 ThermoTrex Corporation - ThermoLase Corporation
(formerly ThermoLase Inc.) Nonqualified Stock Option
Plan (filed as Exhibit 10.53 to ThermoTrex's Annual
Report on Form 10-K for the fiscal year ended
January 1, 1994 [File No. 1-10791] and incorporated
herein by reference).
38PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.59 ThermoLase Corporation (formerly ThermoLase Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10.54
to ThermoTrex Corporation's Annual Report on Form 10-K
for the fiscal year ended January 1, 1994 [File No.
1-10791] and incorporated herein by reference) (Maximum
number of shares issuable in the aggregate under this
plan and the ThermoLase Incentive Stock Option Plan is
1,400,000 shares, after adjustment to reflect share
increases approved in 1993 and 2-for-1 stock split
effected in March 1994).
10.60 ThermoLase Corporation (formerly ThermoLase Inc.)
Incentive Stock Option Plan (filed as Exhibit 10.55 to
ThermoTrex's Annual Report on Form 10-K for the fiscal
year ended January 1, 1994 [File No. 1-10791] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the ThermoLase Nonqualified stock option plan is
1,400,000 shares, after adjustment to reflect share
increase approved in 1993 and 2-for-1 stock split
effected in March 1994).
10.61 Thermo Fibertek Inc. Incentive Stock Option Plan (filed
as Exhibit 10(k) to Thermo Fibertek's Registration
Statement on Form S-1 [Reg. No. 33-51172] and
incorporated herein by reference).
10.62 Thermo Fibertek Inc. Nonqualified Stock Option Plan
(filed as Exhibit 10(l) to Thermo Fibertek's
Registration Statement on Form S-1 [Reg. No. 33-51172]
and incorporated herein by reference).
10.63 Thermo Fibertek Inc. Equity Incentive Plan (filed as
Exhibit 10.60 to Thermo Instrument's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994
[File No. 1-9786] and incorporated herein by
reference).
10.64 Thermo Power Corporation (formerly Tecogen Inc.)
Incentive Stock Option Plan (filed as Exhibit 10(h) to
Thermo Power's Registration Statement on Form S-1 [Reg.
No. 33-14017] and incorporated herein by reference).
(Maximum number of shares issuable in the aggregate
under this plan and the Thermo Power Nonqualified Stock
Option Plan is 950,000 shares, after adjustment to
reflect share increases approved in 1990, 1992, and
1993).
39PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.65 Thermo Power Corporation (formerly Tecogen Inc.)
Nonqualified Stock Option Plan (filed as Exhibit 10(i)
to Thermo Power's Registration Statement on Form S-1
[Reg. No. 33-14017] and incorporated herein by
reference). (Maximum number of shares issuable in the
aggregate under this plan and the Thermo Power
Incentive Stock Option Plan is 950,000 shares, after
adjustment to reflect share increases approved in 1990,
1992, and 1993).
10.66 Thermo Power Corporation Equity Incentive Plan (filed
as Exhibit 10.63 to Thermo Instrument's Annual Report
on Form 10-K for the fiscal year ended December 31,
1994 [File No. 1-9786] and incorporated herein by
reference).
10.67 Thermo Process Systems Inc. Incentive Stock Option Plan
(filed as Exhibit 10(h) to Thermo Process' Registration
Statement on Form S-1 [Reg. No. 33-6763] and
incorporated herein by reference). (Maximum number of
shares issuable in the aggregate under this plan and
the Thermo Process Nonqualified Stock Option Plan is
1,850,000 shares, after adjustment to reflect share
increases approved in 1987, 1989, and 1992, 6-for-5
stock splits effected in July 1988 and March 1989, and
3-for-2 stock split effected in September 1989).
10.68 Thermo Process Systems Inc. Nonqualified Stock Option
Plan (filed as Exhibit 10(i) to Thermo Process'
Registration Statement on Form S-1 [Reg. No. 33-6763]
and incorporated herein by reference). (Maximum number
of shares issuable in the aggregate under this plan and
the Thermo Process Incentive Stock Option Plan is
1,850,000 shares, after adjustment to reflect share
increases approved in 1987, 1989, and 1992, 6-for-5
stock splits effected in July 1988 and March 1989, and
3-for-2 stock split effected in September 1989).
10.69 Thermo Process Systems Inc. Equity Incentive Plan
(filed as Exhibit 10.63 to Thermedics' Annual Report on
Form 10-K for the year ended January 1, 1994 [File No.
1-9567] and incorporated herein by reference). (Maximum
number of shares issuable is 1,750,000 shares, after
adjustment to reflect share increased approved in
1994).
10.70 Thermo Process Systems Inc. - Thermo Remediation Inc.
Nonqualified Stock Option Plan (filed as Exhibit 10(l)
to Thermo Process' Quarterly Report on Form 10-Q for
the fiscal quarter ended January 1, 1994 [File No.
1-9549] and incorporated herein by reference).
40PAGE
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
10.71 Thermo Remediation Inc. Equity Incentive Plan (filed as
Exhibit 10.7 to Thermo Remediation's Registration
Statement on Form S-1 [Reg. No. 33-70544] and
incorporated herein by reference).
10.72 Thermedics Detection Inc. Equity Incentive Plan (filed as
Exhibit 10.69 to Thermo Instrument's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-9786] and incorporated herein by reference).
11 Computation of earnings per share.
13 Annual Report to Shareholders for the year ended
December 31, 1994 (only those portions incorporated
herein by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
40