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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 28, 1996
[ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 1-11406
THERMO FIBERTEK INC.
(Exact name of Registrant as specified in its charter)
Delaware 52-1762325
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
81 Wyman Street
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:
Title of each class Name of each exchange on which registered
---------------------------- -----------------------------------------
Common Stock, $.01 par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, and (2) has been subject to
the filing requirements for at least the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained to the best of the Registrant's knowledge, in definitive proxy
or information statements incorporated by reference into Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of
the Registrant as of January 24, 1997, was approximately $100,854,000.
As of January 24, 1996, the Registrant had 61,138,880 shares of Common
Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year
ended December 28, 1996, are incorporated by reference into Parts I and
II.
Portions of the Registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders to be held on June 2, 1997, are incorporated by
reference into Part III.
PAGE
PART I
Item 1. Business
(a) General Development of Business
Thermo Fibertek Inc. (the Company or the Registrant) designs and
manufactures processing machinery and accessories for the paper and
paper-recycling industries. The Company's principal products include
custom-engineered systems and equipment for the preparation of wastepaper
for conversion into recycled paper, accessory equipment and related
consumables important to the efficient operation of papermaking machines,
and water-management systems essential for draining, purifying, and
recycling process water.
The Company's predecessors have been in operation for more than 80
years, and the Company has a large, stable customer base that includes
most papermakers worldwide. The Company seeks to expand its business
through the introduction of new products and technologies to these
customers. The Company currently manufactures its products in several
countries in Europe and North America, and licenses certain of its
products for manufacture in South America and the Pacific Rim.
In February 1996, Thermo Fibergen Inc. (Thermo Fibergen) was
incorporated as a wholly owned subsidiary of the Company. In connection
with the capitalization of Thermo Fibergen, the Company transferred to
Thermo Fibergen a license to use certain technology and its business
relating to the development of equipment and systems to recover materials
from papermaking sludge generated by plants that produce virgin and
recycled pulp and paper, together with $12,500,000 in cash, in exchange
for 10,000,000 shares of Thermo Fibergen's common stock.
In July 1996, GranTek Inc. (GranTek) a wholly owned subsidiary of
Thermo Fibergen, acquired substantially all of the assets, subject to
certain liabilities, of Granulation Technology, Inc. (Granulation
Technology) and Biodac, a division of Edward Lowe Industries, Inc., for
approximately $12.1 million in cash. GranTek employs patented technology
to produce absorbing granules from papermaking sludge. These granules,
marketed under the trade name BIODAC(R), are currently used as a carrier
to deliver agricultural chemicals for professional turf, home lawn and
garden, and mosquito control applications.
In September 1996, Thermo Fibergen sold 4,715,000 units, each unit
consisting of one share of Thermo Fibergen common stock and one
redemption right, in an initial public offering at $12.75 per unit for
net proceeds of approximately $55.8 million. The common stock and
redemption rights began trading separately on December 13, 1996. Holders
of a redemption right have the option to require Thermo Fibergen to
redeem in September 2000 and 2001, one share of Thermo Fibergen common
stock at $12.75 per share. The redemption rights carry terms that
generally provide for their expiration if the closing price of Thermo
Fibergen's common stock exceeds $19 1/8 for 20 of any 30 consecutive
trading days prior to September 2001. The redemption rights are
guaranteed, on a subordinated basis, by Thermo Electron. The Company has
agreed to reimburse Thermo Electron in the event Thermo Electron is
2PAGE
required to make a payment under the guarantee. Following the initial
public offering, the Company owned 68% of Thermo Fibergen's outstanding
common stock.
On February 26, 1997, the Company entered into a letter of intent to
acquire the assets, subject to certain liabilities, of the
stock-preparation business of The Black Clawson Company (Black Clawson)
for approximately $110 million in cash. Black Clawson is a leading
supplier of recycling equipment used in processing fiber for the
manufacture of "brown paper" such as that used for corrugated boxes. The
transaction is subject to several conditions, including completion by the
Company of its due diligence investigation; negotiation of a definitive
agreement; regulatory approvals, including antitrust clearances; and
approval by the Board of Directors of the Company, Thermo Electron, and
Black Clawson. If this transaction is consummated, the Company intends to
borrow a portion of the purchase price from Thermo Electron.
At December 28, 1996, Thermo Electron owned 51,520,895 shares, or
84%, of the Company's outstanding common stock. Thermo Electron is a
world leader in environmental monitoring and analysis instruments,
biomedical products such as heart-assist devices and mammography systems,
papermaking and paper-recycling equipment, biomass electric power
generation, and other specialized products and technologies. Thermo
Electron also provides a range of services related to environmental
quality.
Thermo Electron intends, for the foreseeable future, to maintain at
least 80% ownership of the Company so that it may continue to file
consolidated U.S. federal income tax returns with the Company. This may
require the purchase by Thermo Electron of additional shares of the
Company's common stock from time to time as the number of outstanding
shares of the Company increases. These and any other purchases may be
made either in the open market, directly from the Company, or pursuant to
conversion of the subordinated convertible note issued by the Company to
Thermo Electron. During 1996*, Thermo Electron purchased 2,383,350 shares
of the Company's common stock in the open market at a total cost of
$29,082,000. See Notes 5 and 8 to Consolidated Financial Statements in
the Company's 1996 Annual Report to Shareholders for a description of
outstanding stock options and the convertible note issued by the Company.
Forward-looking Statements
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Annual Report
on Form 10-K. For this purpose, any statements contained herein that are
not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes,"
"anticipates," "plans," "expects," "seeks," "estimates," and similar
expressions are intended to identify forward-looking statements. There
are a number of important factors that could cause the results of the
Company to differ materially from those indicated by such forward-looking
statements, including those detailed under the caption "Forward-looking
* References to 1996, 1995, and 1994 herein are for the fiscal years
ended December 28, 1996, December 30, 1995, and December 31, 1994,
respectively.
3PAGE
Statements" in the Registrant's 1996 Annual Report to Shareholders
incorporated herein by reference.
(b) Financial Information About Industry Segments
The Company is engaged in one business segment: the design and
manufacture of equipment, accessory products, and water-management
systems for the paper and paper-recycling industries.
(c) Description of Business
(i) Principal Products and Services
Recycling
The Company develops, designs, and manufactures custom-engineered
systems that remove debris, impurities, and ink from wastepaper, and
processes it into a fiber mix used to produce either white or brown
grades of recycled paper. The Company offers more than 20 products
related to all aspects of the recycling process. Some of the systems
include:
Pulping and Trash Removal Systems, including specialized high- and
low-consistency pulpers that blend wastepaper with water and certain
chemicals to form pulp without contaminant breakdown, thus increasing the
efficiency of debris removal; and poires (scavengers) that remove large
debris.
Cleaning and Screening Systems, including high-density screens and
cleaners to remove metals and sand from the pulp mixture, fine screens to
filter microscopic particles of glue and plastic from the pulp mixture,
and the patented Gyroclean(R) system to remove "stickies" and the
lightest plastics from the pulp.
De-inking Systems, including the newly patented MacCell that uses the
latest generation of Autoclean injectors to produce small air bubbles in
the bottom of the pulp slurry. The ink bonds to the air bubbles and rises
to the surface, where it is removed through a unique propellant system.
The efficiency of this unit and the reduced floor space required for
equivalent ink removal make the MacCell one of the Company's most
important products within a de-inking system.
Reject-handling and Water-treatment Systems, including gravity type
strainers and in-line filtration (developed by the Company's AES
Engineered Systems (AES) division), as well as compactors and sand
separators designed to recapture "good" fiber rejected with debris in the
primary process line.
The Company's GranTek subsidiary employs patented technology to
produce absorbing granules from papermaking sludge. These granules,
marketed under the trade name BIODAC, are currently used as a carrier to
deliver agricultural chemicals for professional turf, home lawn and
garden, and mosquito control applications.
4PAGE
Revenues from the Company's paper-recycling business were $56.2
million, $77.0 million, and $50.7 million in 1996, 1995, and 1994,
respectively.
Accessories
The Company designs, develops, and manufactures a wide range of
accessories that continuously clean the rolls of a papermaking machine,
remove the sheet (web) from the roll, automatically cut the web during
sheet breaks, and remove curl from the sheet. These functions are
critical for paper manufacturers because it helps them avoid potential
catastrophic damage to the papermaking equipment while reducing expensive
machine downtime and improving paper quality. Accessories include:
Doctors and related equipment, that shed the sheet from the roll
during sheet breaks and start-ups and keep rolls clean by removing stock
accumulations, water rings, fuzz, pitch, and filler buildup.
Profiling Systems, that help ensure a uniform gloss on the web and
control moisture and curl within the sheet.
Revenues from the Company's accessories business were $82.2 million,
$73.9 million, and $60.4 million in 1996, 1995, and 1994, respectively.
Water-management
The Company designs, develops, and manufactures equipment used to
drain water from the pulp's slurry, form the sheet web, and reuse the
process water. These systems include:
Formation Tables, consisting of free-draining elements and vacuum
augmented elements to control the amount of water removed from the pulp
slurry to form the paper web.
Showers and Felt-conditioning Systems, used to clean and condition
the fabrics and felts which in turn are used to transport the paper web
through various stages of the papermaking machine.
Water-filtration Systems, consisting of pressure, gravity, and vacuum
assisted filters and strainers used to remove extraneous contaminants
from the process water before reuse and to recover reusable fiber for
recycle back into the pulp slurry.
Revenues from the Company's water-management business were $40.0
million, $40.8 million, and $32.2 million in 1996, 1995, and 1994,
respectively.
Other
The Company also manufactures and markets dryers and pollution-
control equipment for the printing, papermaking, and converting
industries. The Company's dryers transfer heat efficiently from the dryer
to the paper web resulting in significant energy savings and improved
paper and printing quality. The Company's thermal incinerators reduce
5PAGE
volatile organic compounds (VOCs) that are produced when solvents
contained in the printed or coated material evaporate.
(ii) and (xi) New Products; Research and Development
The Company believes that it has a reputation as a technological
innovator in the market niches it serves, although rapid technological
obsolescence is not characteristic of the Company's business. The
Company, which maintains active programs for the development of new
products using both new and existing technologies, has technology centers
in Europe and the U.S. dedicated to specific research projects and
markets.
For recycling equipment, the Company maintains a stock-preparation
pilot laboratory adjacent to the manufacturing facility at its E. & M.
Lamort, S.A. (Lamort) subsidiary that contains all equipment necessary to
replicate a commercial stock-preparation system. A customer's wastepaper
can be tested to determine the exact system configuration that would be
recommended for its future facility. The testing laboratory is also used
to evaluate prototype equipment, enabling research teams to quickly and
thoroughly evaluate new designs. In addition, the Company works closely
with its customers in the development of products, typically field
testing new products on the customers' papermaking machines. In the U.S.,
one facility houses an operation for continued development of accessory
products, while another includes development of new water-management
products. GranTek's processing center in Green Bay, Wisconsin, contains a
pilot plant that has been used to develop many of the processes employed
in GranTek's main facility.
The Company seeks to develop a broad range of equipment for all
facets of the markets it serves. Over the next several years the Company
expects to focus its research and development efforts on the advancement
of paper-recycling equipment to further improve the quality of recycled
paper. In 1996, the Company accelerated expenditures at its Thermo
Fibergen subsidiary to develop technology to recover materials from
papermaking sludge generated by plants that produce virgin and recycled
pulp and paper.
Research and development expenses for the Company were $5.5 million,
$4.1 million, and $3.8 million in 1996, 1995, and 1994, respectively.
(iii) Raw Materials
Raw materials, components, and supplies purchased by the Company are
either available from a number of different suppliers or from alternative
sources that could be developed without a material adverse effect on the
Company's business. To date, the Company has experienced no difficulties
in obtaining these materials.
(iv) Patents, Licenses, and Trademarks
The Company protects its intellectual property rights by applying for
and obtaining patents when appropriate. The Company also relies on
technical know-how, trade secrets, and trademarks to maintain its
6PAGE
competitive position. The Company has numerous U.S. and foreign patents,
expiring on various dates ranging from 1997 to 2014.
Third parties have certain rights in two of the Company's patents
that were jointly developed with such parties. The initial development of
the Company's Gyroclean equipment was provided by Centre Technique du
Papier (CTP), to which the Company provided further design refinement and
applications expertise. The Company currently holds an exclusive
long-term, worldwide license for a patent on technology that CTP
developed. The Company and CTP have joint ownership of a second patent on
technology that was jointly developed.
The Company maintains a worldwide network of licensees and cross-
licensees of products with other companies servicing the pulp,
papermaking, converting, and paper-recycling industries. The Company
holds an exclusive worldwide license for its de-inking cells under an
agreement that extends until 2007. The Company also has license
arrangements with several companies with regard to its dryers, pollution-
control equipment, and accessory equipment. The Company's Thermo Fibergen
subsidiary has granted two companies nonexclusive licenses under two of
its patents to sell cellulose-based granules produced at an existing site
for sale in the oil-and-grease absorption and cat-box filler markets.
The Company's 95%-owned Fiberprep subsidiary was granted a license in
1988 from Aikawa Iron Works Co., Ltd. (Aikawa) to manufacture and sell
stock-preparation equipment for brown paper in the U.S. and Canada.
Aikawa owns 5% of Fiberprep's common stock. The Company granted to
Fiberprep a similar license for stock-preparation equipment for white
paper. The licenses with Fiberprep automatically renew every two years
unless canceled upon six months' notice by Fiberprep or the respective
licensors.
(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
revenues in any of the past three years.
(viii) Backlog
The Company's backlog of firm orders as of December 28, 1996, and
December 30, 1995, was $37.1 million and $50.8 million, respectively. The
Company anticipates that substantially all of the backlog at December 28,
1996, will be shipped or completed in 1997.
7PAGE
(ix) Government Contracts
Not applicable.
(x) Competition
The Company faces significant competition in each of its principal
markets. The Company competes principally on the basis of quality,
service, technical expertise, product innovation, and price. The Company
believes that the reputation it has established over more than 80 years
for quality products and in-depth process knowledge provides it with a
competitive advantage. In addition, a significant portion of the
Company's business is generated from its existing customer base. To
maintain this base, the Company has emphasized service and a
problem-solving relationship with its customers.
The Company is a leading supplier of recycling equipment for the
preparation of wastepaper to be used in the production of recycled paper.
There are several major competitors that supply various pieces of
equipment for this process. The Company's principal competitors on a
worldwide basis are Voith Sulzer Papiertechnik, Black Clawson, Beloit
Corporation, Ahlstrom Machine Company, Kvaerner Pulping Technologies,
Sunds Defibrator Inc., Maschinenfabrik Andwitz AG, and Celleco AB.
Various competitors tend to specialize in niche market segments such as
white paper or brown paper. The Company competes in the
recycling-equipment marketplace primarily on the basis of systems
knowledge, product innovation, and price.
The Company is a leading supplier of specialty accessory equipment
for papermaking machines. Because of the high capital costs of
papermaking machines and the role of the Company's accessories in
maintaining the efficiency of these machines, the Company generally
competes in this market on the basis of service, technical expertise, and
performance.
The Company is a leading supplier of water-management systems.
Various competitors exist in the formation table, conditioning and
cleaning systems, and filtration systems markets. JWI Group/Johnson Foils
is a major supplier of formation tables while a variety of smaller
companies compete within the cleaning and conditioning and filtration
markets. In each of these areas, process knowledge, application
experience, product quality, service, and price are key factors.
(xii) Environmental Protection Regulations
The Company believes that compliance by the Company with federal,
state, and local environmental regulations will not have a material
adverse effect on its capital expenditures, earnings, or competitive
position.
(xiii) Number of Employees
As of December 28, 1996, the Company employed approximately 1,100
people. Approximately 68 employees at the Company's Kaukauna, Wisconsin,
operation are represented by a labor union collective bargaining
8PAGE
agreement expiring May 31, 1998. Approximately 32 employees at the
Company's Pointe Claire, Quebec, Canada, operation are represented by a
labor union collective bargaining agreement expiring August 31, 1999.
Approximately 38 employees at the Company's Guadalajara, Mexico,
operation are represented by a labor union under an annual collective
bargaining agreement. In addition, employees of the Company's
subsidiaries in France and England are represented by trade unions. The
Company has had no work stoppages and considers its relations with
employees and unions to be good.
(d) Financial Information About Exports by Domestic Operations and About
Foreign Operations
Financial information about foreign operations is summarized in Note
12 to Consolidated Financial Statements in the Registrant's 1996 Annual
Report to Shareholders and is incorporated herein by reference. The
Company's export operations currently are insignificant.
(e) Executive Officers of the Registrant
Present Title
Name Age (Year First Became Executive Officer)
------------------------------------------------------------------------
William A. Rainville 55 President and Chief Executive Officer
(1991)
John N. Hatsopoulos* 62 Vice President and Chief Financial
Officer (1991)
Jan-Eric Bergstedt 61 Vice President (1996)
Edwin D. Healy 59 Vice President; President, Fiberprep,
Inc. (1994)
Bruno Lamort de Gail 62 Vice President (1991)
Thomas M. O'Brien 45 Vice President, Finance (1994)
Edward J. Sindoni 52 Vice President; President, Thermo
Web Systems, Inc. (1994)
Paul F. Kelleher 54 Chief Accounting Officer (1991)
* John N. Hatsopoulos and Dr. George N. Hatsopoulos, a director of the
Company, are brothers.
Each executive officer serves until his successor is chosen or
appointed by the Board of Directors and qualified or until earlier
resignation, death, or removal. All executive officers except Messrs.
Bergstedt, Healy, O'Brien, and Sindoni have held comparable positions
for at least five years with the Company or with its parent company,
Thermo Electron. Mr. Bergstedt has been a Vice President of the Company
since November 1993 and was designated an executive officer in 1996.
Prior to joining the Company, Mr. Bergstedt was Group Vice President,
Pulp and Paper, at Andritz Sprout-Bauer, Inc., a supplier of equipment
to the pulp and paper industry, from January 1991 to December 1992. Mr.
Healy has been a Vice President of the Company since November 1991,
President of Fiberprep since May 1988, and was designated an executive
officer of the Company in 1994. Mr. O'Brien has been Vice President,
Finance of the Company since November 1991 and was designated an
executive officer in 1994. Mr. Sindoni has been a Vice President of the
Company since November 1991, President of the Company's Thermo Web
9PAGE
Systems, Inc. subsidiary since January 1993, was Senior Vice President
of Thermo Web Systems Inc. from 1987 to January 1993, and was
designated an executive officer in 1994. Messrs. Hatsopoulos and
Kelleher are full-time employees of Thermo Electron, but devote such
time to the affairs of the Company as the Company's needs reasonably
require.
Item 2. Properties
The Company owns approximately 925,000 square feet and leases
approximately 219,000 square feet of manufacturing, engineering, and
office space worldwide under leases expiring at various dates ranging
from 1997 to 2001. The majority of the Company's engineering and
manufacturing space is located in Auburn, Massachusetts; Queensbury, New
York; Kaukauna, Wisconsin; Green Bay, Wisconsin; Pointe Claire, Quebec,
Canada; Vitry-le-Francois, France; and Bury, England. The Company also
has smaller facilities in the United States, England, Germany, Sweden,
and Italy. The Company believes that its facilities are in good condition
and are suitable and adequate for its present operations and that
suitable space is readily available if any of such leases are not
extended.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
10PAGE
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters
Information concerning the market and market price for the
Registrant's Common Stock, $.01 par value, and dividend policy is
included under the sections labeled "Common Stock Market Information" and
"Dividend Policy" in the Registrant's 1996 Annual Report to Shareholders
and is incorporated herein by reference.
Item 6. Selected Financial Data
The information required under this item is included under the
sections labeled "Selected Financial Information" and "Dividend Policy"
in the Registrant's 1996 Annual Report to Shareholders and is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required under this item is included under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Registrant's 1996 Annual Report to
Shareholders and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements as of December 28,
1996, and Supplementary Data are included in the Registrant's 1996 Annual
Report to Shareholders and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
11PAGE
PART III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required under this item is
incorporated herein by reference from the material contained under the
caption "Election of Directors" in the Registrant's definitive proxy
statement to be filed with the Securities and Exchange Commission
pursuant to Regulation 14A, not later than 120 days after the close of
the fiscal year. The information concerning delinquent filers pursuant to
Item 405 of Regulation S-K is incorporated herein by reference from the
material contained under the heading "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Registrant's definitive proxy statement to
be filed with the Securities and Exchange Commission pursuant to
Regulation 14A, not later than 120 days after the close of the fiscal
year.
Item 11. Executive Compensation
The information required under this item is incorporated herein by
reference from the material contained under the caption "Executive
Compensation" in the Registrant's definitive proxy statement to be filed
with the Securities and Exchange Commission pursuant to Regulation 14A,
not later than 120 days after the close of the fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is incorporated herein by
reference from the material contained under the caption "Stock Ownership"
in the Registrant's definitive proxy statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A, not later
than 120 days after the close of the fiscal year.
Item 13. Certain Relationships and Related Transactions
The information required under this item is incorporated herein by
reference from the material contained under the caption "Relationship
with Affiliates" in the Registrant's definitive proxy statement to be
filed with the Securities and Exchange Commission pursuant to Regulation
14A, not later than 120 days after the close of the fiscal year.
12PAGE
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a),(d) Financial Statements and Schedules
(1) The consolidated financial statements set forth in the list
below are filed as part of this Report.
(2) The consolidated financial statement schedule set forth in
the list below is filed as part of this Report.
(3) Exhibits filed herewith or incorporated herein by reference
are set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this
Item 14
Information incorporated by reference from Exhibit 13 filed
herewith:
Consolidated Statement of Income
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Consolidated Statement of Shareholders' Investment
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
Financial Statement Schedules filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable
or not required, or because the required information is shown
either in the financial statements or in the notes thereto.
(b) Reports on Form 8-K
During the Company's quarter ended December 28, 1996, the
Company was not required to file, and did not file, any Current
Report on Form 8-K.
(c) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
13PAGE
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 12, 1997 THERMO FIBERTEK INC.
By: William A. Rainville
--------------------
William A. Rainville
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 12, 1997.
Signature Title
By: William A. Rainville President, Chief Executive Officer,
---------------------
William A. Rainville and Director
By: John N. Hatsopoulos Vice President, Chief Financial
---------------------
John N. Hatsopoulos Officer, and Director
By: Paul F. Kelleher Chief Accounting Officer
---------------------
Paul F. Kelleher
By: Walter J. Bornhorst Director
---------------------
Walter J. Bornhorst
By: George N. Hatsopoulos Director
---------------------
George N. Hatsopoulos
By: Donald E. Noble Chairman of the Board and Director
---------------------
Donald E. Noble
14PAGE
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Thermo Fibertek Inc.:
We have audited, in accordance with generally accepted auditing
standards, the consolidated financial statements included in Thermo
Fibertek Inc.'s Annual Report to Shareholders incorporated by reference
in this Form 10-K, and have issued our report thereon dated February 3,
1997 (except with respect to the matter discussed in Note 14 as to which
the date is February 26, 1997). Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The schedule
listed in Item 14 on page 13 is the responsibility of the Company's
management and is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic consolidated
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects
the consolidated financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts
February 3, 1997
15PAGE
Schedule II
THERMO FIBERTEK INC.
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Balance at Provision Accounts Balance
Beginning Charged Accounts Written at End
of Year to Expense Recovered Off Other(a) of Year
---------- ---------- --------- --------- ------- -------
Year Ended
December 28, 1996
Allowance for
Doubtful
Accounts $2,552 $ (450) $ 74 $ (202) $ (26) $1,948
Year Ended
December 30, 1995
Allowance for
Doubtful
Accounts $2,097 $ 440 $ - $ (110) $ 125 $2,552
Year Ended
December 31, 1994
Allowance for
Doubtful
Accounts $1,641 $ 508 $ - $ (163) $ 111 $2,097
(a) In 1996, represents translation adjustment, net of $30 allowance of
business acquired during the year as described in Note 3 to Consolidated
Financial Statements in the Registrant's 1996 Annual Report to
Shareholders, and represents translation adjustment in 1995 and 1994.
16PAGE
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
2.1 Share Redemption Agreement, dated as of December 22, 1994,
by and among the Registrant, Fiberprep, and Aikawa Iron
Works Co., Ltd. (filed as Exhibit 2.1 to the Registrant's
Current Report on Form 8-K relating to events occurring on
January 2, 1995 [File No 1-11406] and incorporated herein
by reference).
3.1 Certificate of Incorporation, as amended, of the Registrant
(filed as Exhibit 3(i) to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended July 2, 1994 [File No.
1-11406] and incorporated herein by reference).
3.2 By-Laws of the Registrant (filed as Exhibit 3(b) to the
Registrant's Registration Statement on Form S-1 [Reg. No.
33-51172] and incorporated herein by reference).
4.1 Note Purchase Agreement dated as of February 22, 1994,
between the Registrant and Thermo Electron (filed as
Exhibit 4.1 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 1, 1994 [File No.
1-11406] and incorporated herein by reference).
4.2 $15,000,000 principal amount Subordinated Convertible Note
due 1997 from the Registrant to Thermo Electron (filed as
Exhibit 4.2 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended January 1, 1994 [File No.
1-11406] and incorporated herein by reference).
4.3 $5,000,000 promissory note dated September 14, 1993, from
the Registrant to Thermo Electron (filed as Exhibit 2(c) to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended October 2, 1993 [File No. 1-11406] and
incorporated herein by reference).
4.4 $10,400,000 promissory note dated January 5, 1995, from
Fiberprep, Inc. to Thermo Electron (filed as Exhibit 2.2 to
the Registrant's Current Report on Form 8-K relating to
events occurring on January 2, 1995 [File No. 1-11406] and
incorporated herein by reference).
10.1 Exchange Agreement dated as of December 28, 1991, between
Thermo Electron and the Registrant (filed as Exhibit 10(a)
to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-51172] and incorporated herein by reference).
17PAGE
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.2 Amended and Restated Corporate Services Agreement dated
January 3, 1993, between Thermo Electron and the Registrant
(filed as Exhibit 10(b) to the Registrant's Annual Report
on Form 10-K for the fiscal year ended January 2, 1993
[File No. 1-11406] and incorporated herein by reference).
10.3 Thermo Electron Corporate Charter, as amended and restated
effective January 3, 1993 (filed as Exhibit 10(e) to the
Registrant's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993 [File No. 1-11406] and incorporated
herein by reference).
10.4 Thermo Web Systems, Inc. (formerly Thermo Electron Web
Systems, Inc.) Retirement Plan, as amended (filed as
Exhibit 10(g) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-51172] and incorporated herein by
reference).
10.5 Noncompetition Agreement dated May 30, 1990, between Thermo
Electron and Bruno Lamort de Gail (filed as Exhibit 10(h)
to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-51172] and incorporated herein by reference).
10.6 Lamort Retirement Plan (filed as Exhibit 10(i) to the
Registrant's Registration Statement on Form S-1 [Reg. No.
33-51172] and incorporated herein by reference).
10.7 Lamort Retirement Plan for Key Employees (filed as Exhibit
10(j) to the Registrant's Registration Statement on Form
S-1 [Reg. No. 33-51172] and incorporated herein by
reference).
10.8 Severance Agreement dated January 8, 1988, between Thermo
Electron and William A. Rainville (filed as Exhibit 10(p)
to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-51172] and incorporated herein by reference).
10.9 Employment Agreement dated as of May 30, 1990, between the
Registrant and Bruno Lamort de Gail (filed as Exhibit 10(q)
to the Registrant's Registration Statement on Form S-1
[Reg. No. 33-51172] and incorporated herein by reference).
10.10 Form of Indemnification Agreement for officers and
directors (filed as Exhibit 10(s) to the Registrant's
Registration Statement on Form S-1 [Reg. No. 33-51172] and
incorporated herein by reference).
18PAGE
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.11 Tax Allocation Agreement dated as of December 28, 1991,
between the Registrant and Thermo Electron (filed as
Exhibit 10.13 to the Registrant's Annual Report on Form
10-K for the fiscal year ended January 1, 1994 [File No.
1-11406] and incorporated herein by reference).
10.12 Amended and Restated Master Repurchase Agreement dated as
of December 28, 1996.
10.13 Assignment Agreement dated as of December 22, 1994, between
Thermo Electron and TE Great Lakes, Inc. (filed as Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1995 [File No. 1-11406] and
incorporated herein by reference).
10.14 Management Services Agreement dated as of December 22,
1994, between TE Great Lakes, Inc. and Fiberprep (filed as
Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995 [File No.
1-11406] and incorporated herein by reference).
10.15 Equipment Supply Agreement dated as of December 22, 1994,
between TE Great Lakes, Inc. and Fiberprep, Inc. (filed as
Exhibit 10.3 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1995 [File No.
1-11406] and incorporated herein by reference).
10.16-10.18 Reserved.
10.19 Incentive Stock Option Plan of the Registrant (filed as
Exhibit 10(k) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-51172] and incorporated herein by
reference).
10.20 Nonqualified Stock Option Plan of the Registrant (filed as
Exhibit 10(l) to the Registrant's Registration Statement on
Form S-1 [Reg. No. 33-51172] and incorporated herein by
reference).
10.21 Equity Incentive Plan of the Registrant (filed as
Attachment A to the Proxy Statement dated May 3, 1994, of
the Registrant [File No. 1-11406] and incorporated herein
by reference).
10.22 Deferred Compensation Plan for Directors of the Registrant
(filed as Exhibit 10(m) to the Registrant's Registration
Statement on Form S-1 [Reg. No. 33-51172] and incorporated
herein by reference).
19PAGE
Exhibit
Number Description of Exhibit
------------------------------------------------------------------------
10.23 Directors' Stock Option Plan of the Registrant (filed as
Exhibit 10.23 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 [File No.
1-11406] and incorporated herein by reference).
10.24 Thermo Fibergen Inc. Equity Incentive Plan (filed as
Exhibit 10.11 to Thermo Fibergen Inc.'s Registration
Statement on Form S-1 [Registration No. 333-07585] and
incorporated herein by reference).
10.25 Thermo Fibertek - Thermo Fibergen Nonqualified Stock Option
Plan.
In addition to the stock-based compensation plans of the
Registrant, the executive officers of the Registrant may be
granted awards under stock-based compensation plans of
Thermo Electron for services rendered to the Registrant or
to such affiliated corporations. Such plans were filed as
Exhibits 10.21 through 10.44 to the Annual Report on Form
10-K of Thermo Electron for the year ended December 30,
1995 [File No. 1-8002] and as Exhibit 10.19 to the Annual
Report on Form 10-K of Trex Medical Corporation for the
fiscal year ended September 28, 1996 [File No. 1-11827] and
are incorporated herein by reference.
10.26 Restated Stock Holding Assistance Plan and Form of
Promissory Note.
11 Statement re: Computation of Earnings per Share.
13 Annual Report to Shareholders for the year ended December
28, 1996 (only those portions incorporated herein by
reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
20