SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------
FORM 10-Q
(mark one)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended July 4, 1998.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-11827
TREX MEDICAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 06-1439626
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
37 Apple Ridge Road
Danbury, Connecticut 06810
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 622-1000
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 (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Class Outstanding at July 31, 1998
---------------------------- ----------------------------
Common Stock, $.01 par value 34,083,062
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
TREX MEDICAL CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
July 4, September 27,
(In thousands) 1998 1997
- --------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents (includes $34,921
and $34,587 under repurchase agreement
with affiliated company) $ 41,666 $ 36,490
Accounts receivable, less allowances
of $2,933 and $1,298 77,811 44,774
Inventories:
Raw materials and supplies 35,386 25,691
Work in process 15,755 12,755
Finished goods 10,642 4,895
Prepaid expenses 1,967 971
Prepaid income taxes 6,280 6,147
Due from affiliated companies 195 -
-------- --------
189,702 131,723
-------- --------
Property, Plant, and Equipment, at Cost 28,322 22,687
Less: Accumulated depreciation and
amortization 9,045 6,272
-------- --------
19,277 16,415
-------- --------
Deferred Charges and Other Assets 3,439 -
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 4) 119,525 81,299
-------- --------
$331,943 $229,437
======== ========
2
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
July 4, September 27,
(In thousands except share amounts) 1998 1997
- ---------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 22,748 $ 13,900
Accrued payroll and employee benefits 6,954 4,494
Accrued warranty costs 8,839 5,740
Accrued commissions 7,923 3,721
Accrued income taxes 6,406 10,835
Other accrued taxes 3,903 210
Customer deposits 1,668 3,074
Other accrued expenses 14,452 8,788
Due to affiliated companies - 1,312
-------- --------
72,893 52,074
-------- --------
Deferred Income Taxes 222 222
-------- --------
Long-term Obligations:
4.2% Subordinated convertible note, due to
parent company 8,000 8,000
Other 225 47
-------- --------
8,225 8,047
-------- --------
Shareholders' Investment (Note 5):
Common stock, $.01 par value, 50,000,000
shares authorized; 34,082,130 and 28,894,630
shares issued 341 289
Capital in excess of par value 211,838 144,787
Retained earnings 39,232 24,018
Treasury stock at cost, 1,149 shares (21) -
Cumulative translation adjustment (787) -
-------- --------
250,603 169,094
-------- --------
$331,943 $229,437
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
----------------------
July 4, June 28,
(In thousands except per share amounts) 1998 1997
- --------------------------------------------------------------------------
Revenues (includes $1,051 and $2,604 to
affiliated companies; Note 2) $72,100 $58,103
------- -------
Costs and Operating Expenses:
Cost of revenues (includes $425 and $1,554
for affiliated companies' revenues; Note 2) 41,161 34,818
Selling, general, and administrative
expenses 13,774 10,786
Research and development expenses (Note 2) 8,111 6,164
------- -------
63,046 51,768
------- -------
Operating Income 9,054 6,335
Interest Income 784 437
Interest Expense, Related Party (84) (84)
Other Income (Expense), Net (17) 188
------- -------
Income Before Provision for Income Taxes 9,737 6,876
Provision for Income Taxes 4,109 3,216
------- -------
Net Income $ 5,628 $ 3,660
======= =======
Earnings per Share (Note 3):
Basic $ .17 $ .13
======= =======
Diluted $ .16 $ .13
======= =======
Weighted Average Shares (Note 3):
Basic 34,078 28,893
======= =======
Diluted 35,079 29,680
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Income
(Unaudited)
Nine Months Ended
-------------------
July 4, June 28,
(In thousands except per share amounts) 1998 1997
- --------------------------------------------------------------------------
Revenues (includes $2,904 and $10,455 to
affiliated companies; Note 2) $203,568 $171,660
-------- --------
Costs and Operating Expenses:
Cost of revenues (includes $1,306 and $6,360
for affiliated companies' revenues; Note 2) 117,735 105,172
Selling, general, and administrative
expenses 38,158 30,250
Research and development expenses (Note 2) 23,156 18,508
-------- --------
179,049 153,930
-------- --------
Operating Income 24,519 17,730
Interest Income 2,015 1,432
Interest Expense, Related Party (252) (252)
Other Income (Expense), Net (17) 402
-------- --------
Income Before Provision for Income Taxes 26,265 19,312
Provision for Income Taxes 11,051 9,000
-------- --------
Net Income $ 15,214 $ 10,312
======== ========
Earnings per Share (Note 3):
Basic $ .48 $ .36
======== ========
Diluted $ .47 $ .35
======== ========
Weighted Average Shares (Note 3):
Basic 31,581 28,804
======== ========
Diluted 32,500 29,666
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
-------------------
July 4, June 28,
(In thousands) 1998 1997
- --------------------------------------------------------------------------
Operating Activities:
Net income $ 15,214 $ 10,312
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 4,975 3,716
Provision for losses on accounts receivable 700 133
Other noncash items (176) 6
Changes in current accounts, excluding the
effects of acquisitions:
Accounts receivable (20,909) (12,613)
Inventories (7,373) (10,922)
Due from affiliated companies, net (1,507) (2,389)
Other current assets (702) 134
Accounts payable (1,719) 1,707
Other current liabilities (8,336) 7,016
Other - (73)
-------- --------
Net cash used in operating activities (19,833) (2,973)
-------- --------
Investing Activities:
Acquisitions, net of cash acquired (Note 4) (37,446) -
Purchases of property, plant, and equipment (3,230) (4,842)
Other 85 -
-------- --------
Net cash used in investing activities (40,591) (4,842)
-------- --------
Financing Activities:
Net proceeds from issuance of Company
common stock (Note 5) 67,082 4,119
Repayment of short-term borrowings and
capital lease obligations (991) (38)
-------- --------
Net cash provided by financing activities 66,091 4,081
-------- --------
Exchange Rate Effect on Cash (491) -
-------- --------
Increase (Decrease) in Cash and Cash Equivalents 5,176 (3,734)
Cash and Cash Equivalents at Beginning of Period 36,490 33,966
-------- --------
Cash and Cash Equivalents at End of Period $ 41,666 $ 30,232
======== ========
Noncash Activities:
Fair value of assets of acquired companies $ 73,410 $ -
Cash paid for acquired companies (39,862) -
-------- --------
Liabilities assumed of acquired companies $ 33,548 $ -
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
TREX MEDICAL CORPORATION
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 July 4, 1998, the results of
operations for the three- and nine-month periods ended July 4, 1998, and June
28, 1997, and the cash flows for the nine-month periods ended July 4, 1998, and
June 28, 1997. The Company's results of operations for the nine-month periods
ended July 4, 1998, and June 28, 1997, include 40 weeks and 39 weeks,
respectively. Interim results are not necessarily indicative of results for a
full year.
The consolidated balance sheet presented as of September 27, 1997, 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 27,
1997, filed with the Securities and Exchange Commission.
2. Transactions with Affiliated Companies
Revenues from affiliated companies in the accompanying statement of income
includes $922,000 and $2,590,000 during the three- and nine-month periods ended
July 4, 1998, respectively, for sales of laser systems, components, and related
services to ThermoLase Corporation, a majority-owned subsidiary of ThermoTrex
Corporation, the majority owner of the Company. During the three- and nine-month
periods ended June 28, 1997, the Company sold laser systems, components, and
related services to ThermoLase for aggregate revenues of $2,597,000 and
$10,427,000, respectively.
The Company was charged $550,000 and $1,650,000 by ThermoTrex in the three-
and nine-month periods ended July 4, 1998, respectively, for research and
development services provided under a license agreement. The Company was charged
$500,000 and $1,500,000 under this agreement in the three- and nine-month
periods ended June 28, 1997, respectively.
During the three- and nine-month periods ended July 4, 1998, the Company
purchased high-transmission cellular (HTC) grids valued at $98,000 and $260,000,
respectively, from the Tecomet division of Thermo Electron Corporation, the
majority owner of ThermoTrex, under a design and production arrangement. During
the three- and nine-month periods ended June 28, 1997, the Company purchased HTC
grids valued at $127,000 and $609,000, respectively.
7
<PAGE>
3. Earnings per Share
During the first quarter of fiscal 1998, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share." As a
result, all previously reported earnings per share have been restated. Basic
earnings per share have been computed by dividing net income by the weighted
average number of shares outstanding during the period. Diluted earnings per
share have been computed assuming the conversion of the Company's convertible
note and the elimination of the related interest expense, and the exercise of
stock options, as well as their related income tax effects. Basic and diluted
earnings per share were calculated as follows:
Three Months Ended Nine Months Ended
------------------ -----------------
(In thousands except July 4, June 28, July 4, June 28,
per share amounts) 1998 1997 1998 1997
- --------------------------------------------------------------------------
Basic
Net income $ 5,628 $ 3,660 $15,214 $10,312
------- ------- ------- -------
Weighted average shares 34,078 28,893 31,581 28,804
------- ------- ------- -------
Basic earnings per share $ .17 $ .13 $ .48 $ .36
======= ======= ======= =======
Diluted
Net income $ 5,628 $ 3,660 $15,214 $10,312
Effect of convertible note 50 50 151 151
------- ------- ------- -------
Income available to common
shareholders, as adjusted $ 5,678 $ 3,710 $15,365 $10,463
------- ------- ------- -------
Weighted average shares 34,078 28,893 31,581 28,804
Effect of:
Convertible note 679 679 679 679
Stock options 322 108 240 183
------- ------- ------- -------
Weighted average shares,
as adjusted 35,079 29,680 32,500 29,666
------- ------- ------- -------
Diluted earnings per share $ .16 $ .13 $ .47 $ .35
======= ======= ======= =======
4. Acquisitions
On April 29, 1998, the Company acquired the outstanding stock of Trophy
Radiologie, a French manufacturer of dental and medical X-ray systems
specializing in digital dental technology. The purchase price consisted of
$23,979,000 in cash, the repayment of $8,707,000 of net debt, and additional
consideration, not to exceed approximately $8,000,000, if Trophy achieves
certain future earnings targets.
8
<PAGE>
4. Acquisitions (continued)
In October 1997, the Company's XRE subsidiary acquired substantially all of
the assets, subject to certain liabilities, of Digitec Corporation, a North
Carolina-based manufacturer of physiological- monitoring equipment and
digital-image archiving and networking systems used in cardiac catheterization
procedures, for $7,176,000 in cash, subject to a post-closing adjustment. To
date, no information has been gathered that would cause the Company to believe
that the post-closing adjustment will be material.
These acquisitions have been accounted for using the purchase method of
accounting, and the results of operations have been included in the accompanying
financial statements from the respective dates of acquisition. The cost of these
acquisitions exceeded the estimated fair value of the acquired net assets by
$40,549,000, which is being amortized over periods of 15 to 40 years. Allocation
of the purchase price was based on an estimate of the fair value of the net
assets acquired and is subject to adjustment upon finalization of the purchase
price allocations. The Company has gathered no information that indicates the
final allocations will differ materially from the preliminary estimates.
Based on unaudited data, the following table presents selected financial
information for the Company and Trophy on a pro forma basis, assuming the
companies had been combined since the beginning of fiscal 1997. The effect of
Digitec was not material to the Company's results of operations.
Three Months Ended Nine Months Ended
------------------- ------------------
(In thousands except July 4, June 28, July 4, June 28,
per share amounts) 1998 1997 1998 1997
- ----------------------------------------------------------------------
Revenues $ 76,735 $ 74,048 $241,682 $222,930
Net income 5,235 3,648 13,983 9,361
Earnings per share:
Basic .15 .11 .41 .28
Diluted .15 .11 .40 .27
The pro forma results are not necessarily indicative of future operations or
the actual results that would have occurred had the acquisition of Trophy been
made at the beginning of fiscal 1997.
5. Sale of Common Stock
In February 1998, the Company sold 5,175,000 shares of its common stock in a
public offering at $13.75 per share, for net proceeds of $66,944,000.
9
<PAGE>
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 heading "Forward-looking
Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for the
fiscal year ended September 27, 1997, filed with the Securities and Exchange
Commission.
Overview
The Company designs, manufactures, and markets mammography equipment and
minimally invasive digital breast-biopsy systems, general-purpose X-ray
equipment, and specialized X-ray equipment, including imaging systems used
during diagnostic and interventional vascular and cardiac procedures such as
balloon angioplasty. The Company sells its systems worldwide principally through
a network of independent dealers and, to a lesser extent, through direct sales
people and specialists. In addition, the Company manufactures breast-biopsy and
X-ray systems as an original equipment manufacturer (OEM) for other medical
equipment companies such as United States Surgical Corporation and General
Electric Company. Until April 1998, the Company had four operating units: Lorad,
a manufacturer of mammography and digital breast-biopsy systems; Bennett X-Ray
Corporation, a manufacturer of general-purpose X-ray and mammography equipment;
XRE Corporation, 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, a manufacturer of general-purpose and specialized
X-ray systems. In April 1998, the Company acquired the outstanding stock of
Trophy Radiologie, a French manufacturer of dental and medical X-ray systems
specializing in digital dental technology.
The Company conducts all of its manufacturing operations, other than those
of Trophy, in the United States and sells its products worldwide. The Company
anticipates that an increasing amount of its revenues will be from sales to
customers outside the United States. Although the Company seeks to charge its
customers in the same currency as its operating costs, the Company's financial
performance and competitive position can be affected by currency exchange rate
fluctuations affecting the relationship between the U.S. dollar and foreign
currencies. The Company may use forward contracts to reduce its exposure to
currency fluctuations.
10
<PAGE>
Results of Operations
Third Quarter Fiscal 1998 Compared With Third Quarter Fiscal 1997
Revenues increased 24% to $72.1 million in the third quarter of fiscal 1998
from $58.1 million in the third quarter of fiscal 1997. Revenues increased $10.1
million as a result of the acquisition of Trophy Radiologie in April 1998 (Note
4). Revenues increased at Continental as a result of increased demand for
digital radiographic/fluoroscopic systems. Increased revenues at Lorad resulting
from increased demand for mammography systems and mammography system upgrade
components were offset in part by a $2.0 million decline in sales of its laser
systems and components to ThermoLase Corporation, a majority-owned subsidiary of
ThermoTrex Corporation. Revenues increased at XRE primarily due to increased
demand for its cardiac catheterization laboratories. These increases were offset
in part by decreased revenues at Bennett as a result of lower demand for its
general-purpose X-ray systems by international customers, primarily in Asia.
The gross profit margin increased to 43% in the third quarter of fiscal 1998
from 40% in the third quarter of fiscal 1997, primarily due to increased sales
of higher-margin products at a majority of the Company's operations. To a lesser
extent, the gross profit margin increased due to margin improvements resulting
from manufacturing efficiencies, primarily at Continental and Bennett.
Selling, general, and administrative expenses as a percentage of revenues
remained constant at 19% in the third quarter of fiscal 1998 and fiscal 1997.
The impact of a slight decline in selling, general, and administrative expenses
as a percentage of revenues at the Company's existing operations was offset by
the inclusion of the results of Trophy, which has higher costs as a percentage
of revenues. Research and development expenses increased to $8.1 million in
fiscal 1998 from $6.2 million in fiscal 1997, due in part to the inclusion of
$0.9 million of expenses at Trophy, and reflect the Company's continued efforts
to develop and commercialize new products, including the full-field digital
mammography system and direct-detection X-ray sensor, as well as enhancements of
existing systems.
Interest income increased to $784,000 in the third quarter of fiscal 1998
from $437,000 in the third quarter of fiscal 1997, primarily due to interest
earned on the invested proceeds from the sale of the Company's common stock in
February 1998 (Note 5), of which a portion was used to fund the April 1998
acquisition of Trophy. Interest expense, related party, represents interest
associated with the 4.2% subordinated convertible note issued to ThermoTrex.
The effective tax rate decreased to 42% in the third quarter of fiscal 1998
from 47% in the third quarter of fiscal 1997. The effective tax rate decreased
primarily due to the smaller relative impact of
11
<PAGE>
Third Quarter Fiscal 1998 Compared With Third Quarter Fiscal 1997
(continued)
nondeductible expenses as a percentage of pretax income. The effective tax rates
exceeded the statutory federal income tax rate primarily due to the impact of
state income taxes and nondeductible amortization of cost in excess of net
assets of acquired companies.
The Company is currently assessing the potential impact of the year 2000 on
the processing of date-sensitive information by the Company's computerized
information systems and on products sold as well as products purchased by the
Company. The Company believes that its internal information systems and current
products are either year 2000 compliant or will be so prior to the year 2000
without incurring material costs. There can be no assurance, however, that the
Company will not experience unexpected costs and delays in achieving year 2000
compliance for its internal information systems and current products, which
could result in a material adverse effect on the Company's future results of
operations.
The Company is presently assessing the effect that the year 2000 problem may
have on its previously sold products. The Company is also assessing whether its
key suppliers are adequately addressing this issue and the effect this might
have on the Company. The Company has not completed its analysis and is unable to
conclude at this time that the year 2000 problem as it relates to its previously
sold products and products purchased from key suppliers is not reasonably likely
to have a material adverse effect on the Company's future results of operations.
First Nine Months Fiscal 1998 Compared With First Nine Months Fiscal 1997
Revenues increased 19% to $203.6 million in the first nine months of fiscal
1998 from $171.7 million in the first nine months of fiscal 1997. Revenues
increased $11.8 million as a result of the acquisitions of Trophy in April 1998
and Digitec Corporation in October 1997 (Note 4). Excluding the impact of
revenues from acquisitions, revenues increased 12% in fiscal 1998, primarily due
to increases at XRE and Lorad, as discussed in the results of operations for the
third quarter.
The gross profit margin increased to 42% in the first nine months of fiscal
1998 from 39% in the first nine months of fiscal 1997, primarily due to the
reasons discussed in the results of operations for the third quarter.
Selling, general, and administrative expenses as a percentage of revenues
increased to 19% in the first nine months of fiscal 1998 from 18% in the first
nine months of fiscal 1997, primarily due to the inclusion of the results of
Trophy. Research and development expenses increased to $23.2 million in fiscal
1998 from $18.5 million in fiscal 1997, primarily due to increased spending at
XRE and Lorad, and reflect continued efforts to develop new products and enhance
existing systems as discussed in the results of operations for the third
quarter.
12
<PAGE>
First Nine Months Fiscal 1998 Compared With First Nine Months Fiscal 1997
(continued)
Interest income increased to $2.0 million in the first nine months of fiscal
1998 from $1.4 million in the first nine months of fiscal 1997, primarily due to
the reason discussed in the results of operations for the third quarter.
The effective tax rates were 42% and 47% in the first nine months of fiscal
1998 and 1997, respectively. The effective tax rate decreased, primarily due to
the reason discussed in the results of operations for the third quarter. The
effective tax rates exceeded the statutory federal income tax rate primarily 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 $116.8 million at July 4, 1998, compared
with $79.6 million at September 27, 1997. Included in working capital are cash
and cash equivalents of $41.7 million at July 4, 1998, compared with $36.5
million at September 27, 1997. Net cash used in operating activities was $19.8
million in the first nine months of fiscal 1998. The Company used $20.9 million
of cash during the period to fund an increase in accounts receivable, primarily
due to increased sales. In addition, accounts receivable increased due to slower
customer payment patterns as a result of increased export and direct sales at
the majority of the Company's operations, extended payment terms for a
significant customer, and a shift from OEM sales to direct and dealer sales at
XRE. The Company used $7.4 million of cash during the period to fund an increase
in inventories, primarily to support the Company's increased sales. The Company
used $8.3 million during the period to reduce other current liabilities,
primarily as a result of federal and state income tax payments.
The Company used $37.4 million, net of cash acquired, for acquisitions in
the first nine months of fiscal 1998 (Note 4).
The Company expended $3.2 million for purchases of property, plant, and
equipment in the first nine months of fiscal 1998 and expects to make capital
expenditures of approximately $1.3 million during the remainder of the fiscal
year.
In February 1998, the Company sold 5,175,000 shares of its common stock in a
public offering at $13.75 per share, for net proceeds of $66.9 million. The
Company used a portion of the proceeds to finance the April 1998 acquisition of
Trophy.
13
<PAGE>
Liquidity and Capital Resources (continued)
Although the Company generally expects to have positive cash flow from its
existing operations, the Company 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 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 1 - Legal Proceedings
On April 7, 1998, Fischer Imaging Corporation commenced a lawsuit in the
United States District Court, District of Colorado, against the Company,
alleging that its manufacture of breast-imaging equipment and breast-biopsy
systems incorporating a digital imaging system, including Lorad's prone
breast-biopsy system, infringe a Fischer patent entitled Motorized Mammographic
Biopsy Apparatus, which issued April 7, 1998. This lawsuit is the second patent
lawsuit filed by Fischer against the Company with respect to the breast-biopsy
system and requests a permanent injunction, treble damages, attorneys' fees, and
expenses. These two lawsuits have been consolidated into a single lawsuit.
Item 5 - Other Information
Pursuant to recent amendments to the rules relating to proxy statements
under the Securities Exchange Act of 1934, as amended (the Exchange Act),
shareholders of the Company are hereby notified that any shareholder proposal
not included in the Company's proxy materials for its 1999 Annual Meeting of
Shareholders (the Annual Meeting) in accordance with Rule 14a-8 under the
Exchange Act will be considered untimely for the purposes of Rules 14a-4 and
14a-5 under the Exchange Act if notice thereof is received by the Company after
December 8, 1998. Management proxies will be authorized to exercise
discretionary voting authority with respect to any shareholder proposal not
included in the Company's proxy materials for the Annual Meeting unless (a) the
Company receives notice of such proposal by December 8, 1998, and (b) the
conditions set forth in Rule 14a-4(c)(2)(i)-(iii) under the Exchange Act are
met.
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
14
<PAGE>
TREX MEDICAL CORPORATION
SIGNATURES
Pursuant to the requirements 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 as of the 6th day of August 1998.
TREX MEDICAL CORPORATION
Paul F. Kelleher
----------------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
----------------------------
John N. Hatsopoulos
Chief Financial Officer and
Senior Vice President
15
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ----------------------------------------------------------------------------
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION'S REPORT ON FORM 10-Q FOR THE PERIOD ENDED JULY 4, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-03-1998
<PERIOD-END> JUL-04-1998
<CASH> 41,666
<SECURITIES> 0
<RECEIVABLES> 80,744
<ALLOWANCES> 2,933
<INVENTORY> 61,783
<CURRENT-ASSETS> 189,702
<PP&E> 28,322
<DEPRECIATION> 9,045
<TOTAL-ASSETS> 331,943
<CURRENT-LIABILITIES> 72,893
<BONDS> 225
0
0
<COMMON> 341
<OTHER-SE> 250,262
<TOTAL-LIABILITY-AND-EQUITY> 331,943
<SALES> 203,568
<TOTAL-REVENUES> 203,568
<CGS> 117,735
<TOTAL-COSTS> 117,735
<OTHER-EXPENSES> 23,156
<LOSS-PROVISION> 700
<INTEREST-EXPENSE> 252
<INCOME-PRETAX> 26,265
<INCOME-TAX> 11,051
<INCOME-CONTINUING> 15,214
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,214
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.47
</TABLE>
