Filed Pursuant to
Rules 424(b)(3) and
424(c) of the Securities
Act of 1933 Registration
No. 333-15381
Prospectus Supplement
---------------------
Supplement to Prospectus
dated
January 10, 1997
TREX MEDICAL CORPORATION
1,962,000
Common Stock
This prospectus supplement relates to 1,962,000 shares of Common
Stock, par value $.01 per share, of Trex Medical Corporation (the
"Company").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
No dealer, salesman or any other person has been authorized to give
any information or to make any representations in connection with this
offering other than those contained in this Prospectus and, if given or
made, such information or representation must not be relied upon as having
been authorized by the company or by any other person. All information
contained in this Prospectus is as of the date of this Prospectus. This
Prospectus does not constitute any offer to sell or a solicitation of any
offer to buy any security other than the securities covered by this
Prospectus, nor does it constitute an offer to or solicitation of any
person in any jurisdiction in which such offer or solicitation may not be
lawfully made. Neither the delivery of this Prospectus nor any sale or
distribution made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company
since the date hereof.
____________________________________
March 27, 1997
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
-----------------------------
TREX MEDICAL CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
December 28, September 28,
(In thousands) 1996 1996
------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 38,179 $ 33,966
Accounts receivable, less allowances
of $1,281 and $1,264 30,284 29,104
Inventories:
Raw materials and supplies 23,880 20,513
Work in process 11,493 9,218
Finished goods 3,404 3,279
Prepaid expenses 1,062 1,316
Prepaid income taxes 5,712 5,712
-------- --------
114,014 103,108
-------- --------
Property, Plant and Equipment, at Cost 18,587 17,259
Less: Accumulated depreciation and
amortization 3,993 3,489
-------- --------
14,594 13,770
-------- --------
Cost in Excess of Net Assets of Acquired
Companies 83,430 83,972
-------- --------
$212,038 $200,850
======== ========
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Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
December 28, September 28,
(In thousands except share amounts) 1996 1996
------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 13,980 $ 12,598
Accrued payroll and employee benefits 3,380 4,616
Accrued warranty costs 5,567 5,344
Accrued income taxes 5,400 2,010
Customer deposits 3,750 3,414
Accrued commissions 2,756 1,938
Other accrued expenses 9,762 10,265
Due to affiliated companies 2,472 3,089
-------- --------
47,067 43,274
-------- --------
Deferred Income Taxes 170 170
-------- --------
Long-term Obligations:
4.2% Subordinated convertible note, due to
parent company 8,000 8,000
Other 99 109
-------- --------
8,099 8,109
-------- --------
Shareholders' Investment (Note 3):
Common stock, $.01 par value, 50,000,000
shares authorized; 28,892,630 and
28,592,630 shares issued and outstanding 289 286
Capital in excess of par value 143,783 139,667
Retained earnings 12,630 9,344
-------- --------
156,702 149,297
-------- --------
$212,038 $200,850
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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Consolidated Statement of Income
(Unaudited)
Three Months Ended
----------------------------
December 28, December 30,
(In thousands except per share amounts) 1996 1995
-----------------------------------------------------------------------
Revenues (includes $3,880 and $550 to
affiliated companies; Note 2) $54,915 $32,509
------- -------
Costs and Operating Expenses:
Cost of revenues (includes $2,426 and
$263 for affiliated companies
revenues; Note 2) 33,450 18,248
Selling, general and administrative expenses 9,615 6,868
Research and development expenses (Note 2) 6,206 4,098
------- -------
49,271 29,214
------- -------
Operating Income 5,644 3,295
Interest Income 486 125
Interest Expense, Related Party (84) (431)
Other Income, Net 78 39
------- -------
Income Before Provision for Income Taxes 6,124 3,028
Provision for Income Taxes 2,838 1,402
------- -------
Net Income $ 3,286 $ 1,626
======= =======
Earnings per Share $ .11 $ .08
======= =======
Weighted Average Shares 28,626 20,995
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
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Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
----------------------------
December 28, December 30,
(In thousands) 1996 1995
-----------------------------------------------------------------------
Operating Activities:
Net income $ 3,286 $ 1,626
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 1,146 716
Provision for losses on accounts
receivable 96 29
Other noncash items 6 (82)
Changes in current accounts:
Accounts receivable (1,276) (2,398)
Inventories (5,767) (100)
Other current assets 251 (1,177)
Accounts payable 1,382 (377)
Other current liabilities 2,411 5,932
-------- --------
Net cash provided by operating activities 1,535 4,169
-------- --------
Investing Activities:
Purchases of property, plant and equipment (1,431) (695)
Proceeds from sale of property, plant and
equipment - 30
-------- --------
Net cash used in investing activities (1,431) (665)
-------- --------
Financing Activities:
Net proceeds from issuance of Company
common stock (Note 3) 4,119 17,619
Other (10) -
-------- --------
Net cash provided by financing activities 4,109 17,619
-------- --------
Increase in Cash and Cash Equivalents 4,213 21,123
Cash and Cash Equivalents at Beginning of
Period 33,966 202
-------- --------
Cash and Cash Equivalents at End of Period $ 38,179 $ 21,325
======== ========
Noncash Activities:
Issuance of subordinated convertible note
to parent company $ - $ 42,000
The accompanying notes are an integral part of these consolidated financial
statements.
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Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by Trex Medical Corporation (the Company) without audit and, in
the opinion of management, reflect all adjustments of a normal recurring
nature necessary for a fair statement of the financial position at December
28, 1996, the results of operations for the three-month periods ended
December 28, 1996 and December 30, 1995, and the cash flows for the
three-month periods ended December 28, 1996 and December 30, 1995. Interim
results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of September 28, 1996, has
been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The consolidated
financial statements and notes are presented as permitted by Form 10-Q and
do not contain certain information included in the annual financial
statements and notes of the Company. The consolidated financial statements
and notes included herein should be read in conjunction with the financial
statements and notes included in the Company's Annual Report on Form 10-K
for the fiscal year ended September 28, 1996, filed with the Securities and
Exchange Commission.
2. Related Party Transactions
During the three months ended December 28, 1996 and December 30, 1995,
the Company sold laser systems to ThermoLase Corporation, a majority-owned
subsidiary of ThermoTrex Corporation (ThermoTrex), for aggregate revenues
of $3,880,000 and $350,000, respectively.
The Company was charged $500,000 and $450,000 by ThermoTrex in the
three months ended December 28, 1996 and December 30, 1995, respectively,
for research and development services provided under a license agreement.
During the three months ended December 28, 1996, the Company purchased
high-transmission cellular grids valued at $243,000 from Thermo Electron
Corporation's Tecomet division under a design and production arrangement.
No such purchases were made during the three months ended December 30,
1995.
3. Sale of Common Stock
In December 1996, the Company issued 300,000 shares of its common stock
in a private placement at $14.50 per share, for net proceeds of
approximately $4,119,000. Following the private placement, ThermoTrex owned
79% of the Company's outstanding common stock.
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Item 2 - Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations
---------------------
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
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 Statements" in Exhibit 13 to
the Company's Annual Report on Form 10-K for the fiscal year ended
September 28, 1996, filed with the Securities and Exchange Commission.
Overview
The Company designs, manufactures, and markets mammography equipment
and minimally invasive stereotactic breast-biopsy systems, general
radiography (X-ray) equipment, and X-ray imaging systems used for cardiac
catheterization and angiography, as well as radiographic/fluoroscopic
procedures. The Company sells its systems worldwide principally through a
network of independent dealers. In addition, the Company manufactures
mammography and radiography systems as an original equipment manufacturer
(OEM) for other medical equipment companies such as United States Surgical
Corporation (U.S. Surgical), General Electric Company, Inc. (GE), and the
Philips Medical Systems North America Company subsidiary of Philips N.V.
(Philips). The Company has four operating units: Lorad, a manufacturer of
mammography and stereotactic breast-biopsy systems; Bennett X-Ray
Corporation (Bennett), a manufacturer of general X-ray and mammography
equipment; XRE Corporation (XRE), a manufacturer of X-ray imaging systems
used in the diagnosis and treatment of coronary artery disease and other
vascular conditions; and Continental X-Ray Corporation (Continental), a
manufacturer of general-purpose and specialized X-ray systems.
The Company conducts all of its manufacturing operations in the United
States and sells its products on a worldwide basis. The Company anticipates
that an increasing percentage of its revenues will be from export sales.
The Company's export sales are denominated in U.S. dollars; therefore,
neither its revenue nor its earnings are significantly affected by exchange
rate fluctuations.
Results of Operations
First Quarter Fiscal 1997 Compared With First Quarter Fiscal 1996
-----------------------------------------------------------------
Revenues increased 69% to $54.9 million in the first quarter of fiscal
1997 from $32.5 million in the first quarter of fiscal 1996, primarily due
to the inclusion of $16.5 million in revenues from Continental, acquired in
September 1996, and XRE, acquired in May 1996. Revenues at Lorad increased
27% to $27.0 million in the first quarter
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First Quarter Fiscal 1997 Compared With First Quarter Fiscal 1996
-----------------------------------------------------------------
(continued)
of fiscal 1997 from $21.3 million in the first quarter of fiscal 1996 as a
result of increased demand for mammography systems, biopsy systems, and
lasers sold to ThermoLase Corporation, a majority-owned subsidiary of
ThermoTrex Corporation (ThermoTrex). Under an OEM agreement with U.S.
Surgical, Lorad has agreed to manufacture biopsy systems that are marketed
and sold by U.S. Surgical as the ABBI (Advanced Breast-biopsy Instrument)
System. Sales to U.S. Surgical totaled $10.1 million in the first quarter
of fiscal 1997, compared with $1.1 million in the first quarter of fiscal
1996.
The gross profit margin declined to 39% in the first quarter of fiscal
1997 from 44% in the first quarter of fiscal 1996 due to the inclusion of
lower-margin revenues at Continental and the mix of products sold at Lorad.
Selling, general, and administrative expenses as a percentage of
revenues decreased to 18% in the first quarter of fiscal 1997 from 21% in
the first quarter of fiscal 1996, due primarily to increased revenues at
Lorad and, to a lesser extent, lower advertising and other selling expenses
at Bennett during the quarter. Research and development expenses increased
to $6.2 million in the first quarter of fiscal 1997 from $4.1 million in
the first quarter of fiscal 1996, due primarily to the inclusion of $1.7
million of expense at XRE and Continental and the Company's continued
efforts to develop and commercialize new products, including the Company's
full-breast digital mammography system and direct-detection X-ray sensor,
as well as enhancements of existing systems.
Interest income in the first quarter of fiscal 1997 represents interest
earned on the invested proceeds from the Company's initial public offering
of common stock in July 1996, net of cash paid for the September 1996
acquisition of Continental. Interest expense, related party, represents
interest associated with the $42.0 million principal amount 4.2%
subordinated convertible note issued to ThermoTrex. Interest expense
decreased in the first quarter of fiscal 1997, compared with the first
quarter of fiscal 1996, as a result of the conversion by ThermoTrex of
$34.0 million principal amount in fiscal 1996.
The effective tax rate was 46% in the first quarter of both fiscal 1997
and fiscal 1996. The effective tax rate exceeds the statutory federal
income tax rate due to the impact of state income taxes and nondeductible
amortization of cost in excess of net assets of acquired companies.
Liquidity and Capital Resources
Consolidated working capital was $66.9 million at December 28, 1996,
compared with $59.8 million at September 28, 1996. Included in working
capital are cash and cash equivalents of $38.2 million at December 28,
1996, compared with $34.0 million at September 28, 1996. Net cash provided
by operating activities was $1.5 million in the first quarter of
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Liquidity and Capital Resources (continued)
fiscal 1997. During this period, $5.8 million of cash was used to fund an
increase in inventories. The increase primarily represents materials
requirements for commitments under an OEM agreement, to be shipped during
the remainder of fiscal 1997, and higher inventory levels in support of the
Company's increase in sales.
The Company expended $1.4 million for property, plant, and equipment in
the first quarter of fiscal 1997 and expects to make capital expenditures
of approximately $4.5 million during the remainder of the fiscal year.
In December 1996, the Company issued 300,000 shares of its common stock
in a private placement for net proceeds of approximately $4.1 million.
Although the Company expects to have positive cash flow from its
existing operations, the Company anticipates it may require significant
amounts of cash for any acquisition of a business or technology. The
Company expects that it will finance any such acquisitions through a
combination of internal funds, additional debt or equity financing, and/or
short-term borrowings from ThermoTrex or Thermo Electron Corporation,
although it has no agreement with these companies to ensure funds will be
available on acceptable terms or at all. The Company believes its existing
resources are sufficient to meet the capital requirements of its existing
operations for the foreseeable future.
PART II - OTHER INFORMATION
Item 2 - Changes in Securities
------------------------------
(c) Recent Sales of Unregistered Securities
On December 19, 1996, the Company sold an aggregate of 300,000 shares
of its common stock to a group of accredited investors in a private
placement pursuant to Regulation D of the Securities and Exchange
Commission, promulgated under the Securities Act of 1933, at an aggregate
offering price of $4,350,000.
AA970860013
