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 April 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 May 1, 1998
---------------------------- --------------------------
Common Stock, $.01 par value 34,078,130
PAGE
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
-----------------------------
TREX MEDICAL CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
April 4, September 27,
(In thousands) 1998 1997
------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents (includes $89,373
and $34,587 under repurchase agreement
with affiliated company) $ 91,011 $ 36,490
Accounts receivable, less allowances
of $1,653 and $1,298 57,057 44,774
Inventories:
Raw materials and supplies 25,700 25,691
Work in process 15,996 12,755
Finished goods 6,185 4,895
Prepaid expenses 1,996 971
Prepaid income taxes 6,147 6,147
-------- --------
204,092 131,723
-------- --------
Property, Plant, and Equipment, at Cost 24,747 22,687
Less: Accumulated depreciation and
amortization 8,011 6,272
-------- --------
16,736 16,415
-------- --------
Cost in Excess of Net Assets of Acquired
Companies (Note 4) 87,077 81,299
-------- --------
$307,905 $229,437
======== ========
2PAGE
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TREX MEDICAL CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
April 4, September 27,
(In thousands except share amounts) 1998 1997
------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 15,694 $ 13,900
Accrued payroll and employee benefits 3,600 4,494
Accrued income taxes 9,514 10,835
Accrued commissions 6,017 3,721
Accrued warranty costs 5,807 5,740
Customer deposits 2,018 3,074
Other accrued expenses 10,637 8,998
Due to affiliated companies 674 1,312
-------- --------
53,961 52,074
-------- --------
Deferred Income Taxes 222 222
-------- --------
Long-term Obligations:
4.2% Subordinated convertible note, due to
parent company 8,000 8,000
Other 10 47
-------- --------
8,010 8,047
-------- --------
Shareholders' Investment (Note 5):
Common stock, $.01 par value, 50,000,000
shares authorized; 34,077,630 and 28,894,630
shares issued 341 289
Capital in excess of par value 211,788 144,787
Retained earnings 33,604 24,018
Treasury stock at cost, 1,149 shares (21) -
-------- --------
245,712 169,094
-------- --------
$307,905 $229,437
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
3PAGE
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Income
(Unaudited)
Three Months Ended
---------------------
April 4, March 29,
(In thousands except per share amounts) 1998 1997
----------------------------------------------------------------------
Revenues (includes $1,364 and $3,971 to
affiliated companies; Note 2) $67,347 $58,642
------- -------
Costs and Operating Expenses:
Cost of revenues (includes $662 and $2,464
for affiliated companies revenues; Note 2) 39,464 36,904
Selling, general, and administrative
expenses 12,034 9,849
Research and development expenses (Note 2) 7,542 6,138
------- -------
59,040 52,891
------- -------
Operating Income 8,307 5,751
Interest Income 785 509
Interest Expense, Related Party (84) (84)
Other Income, Net - 136
------- -------
Income Before Provision for Income Taxes 9,008 6,312
Provision for Income Taxes 3,783 2,946
------- -------
Net Income $ 5,225 $ 3,366
======= =======
Earnings per Share (Note 3):
Basic $ .16 $ .12
======= =======
Diluted $ .16 $ .11
======= =======
Weighted Average Shares (Note 3):
Basic 31,771 28,893
======= =======
Diluted 32,648 29,723
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
4PAGE
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Income
(Unaudited)
Six Months Ended
-----------------------
April 4, March 29,
(In thousands except per share amounts) 1998 1997
----------------------------------------------------------------------
Revenues (includes $1,853 and $7,851 to
affiliated companies; Note 2) $131,468 $113,557
-------- --------
Costs and Operating Expenses:
Cost of revenues (includes $881 and $4,890
for affiliated companies revenues; Note 2) 76,574 70,354
Selling, general, and administrative
expenses 24,384 19,464
Research and development expenses (Note 2) 15,045 12,344
-------- --------
116,003 102,162
-------- --------
Operating Income 15,465 11,395
Interest Income 1,231 995
Interest Expense, Related Party (168) (168)
Other Income, Net - 214
-------- --------
Income Before Provision for Income Taxes 16,528 12,436
Provision for Income Taxes 6,942 5,784
-------- --------
Net Income $ 9,586 $ 6,652
======== ========
Earnings per Share (Note 3):
Basic $ .32 $ .23
======== ========
Diluted $ .31 $ .23
======== ========
Weighted Average Shares (Note 3):
Basic 30,333 28,759
======== ========
Diluted 31,195 29,659
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
5PAGE
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Six Months Ended
---------------------
April 4, March 29,
(In thousands) 1998 1997
----------------------------------------------------------------------
Operating Activities:
Net income $ 9,586 $ 6,652
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 3,043 2,376
Provision for losses on accounts receivable 373 53
Changes in current accounts, excluding the
effects of acquisition:
Accounts receivable (12,395) (4,164)
Inventories (4,230) (8,073)
Other current assets (995) 519
Accounts payable 1,794 1,729
Other current liabilities (519) 2,269
Other - (67)
-------- --------
Net cash provided by (used in) operating
activities (3,343) 1,294
-------- --------
Investing Activities:
Acquisition, net of cash acquired (Note 4) (7,174) -
Purchases of property, plant, and equipment (1,957) (3,063)
-------- --------
Net cash used in investing activities (9,131) (3,063)
-------- --------
Financing Activities:
Net proceeds from issuance of Company
common stock (Note 5) 67,032 4,119
Other (37) (24)
-------- --------
Net cash provided by financing activities 66,995 4,095
-------- --------
Increase in Cash and Cash Equivalents 54,521 2,326
Cash and Cash Equivalents at Beginning of
Period 36,490 33,966
-------- --------
Cash and Cash Equivalents at End of Period $ 91,011 $ 36,292
======== ========
6PAGE
<PAGE>
TREX MEDICAL CORPORATION
Consolidated Statement of Cash Flows (continued)
(Unaudited)
Six Months Ended
---------------------
April 4, March 29,
(In thousands) 1998 1997
----------------------------------------------------------------------
Noncash Activities:
Fair value of assets of acquired company $ 7,787 $ -
Cash paid for acquired company (7,176) -
-------- --------
Liabilities assumed of acquired company $ 611 $ -
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
7PAGE
<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 April
4, 1998, the results of operations for the three- and six-month periods
ended April 4, 1998, and March 29, 1997, and the cash flows for the
six-month periods ended April 4, 1998, and March 29, 1997. The Company's
results of operations for the six-month periods ended April 4, 1998, and
March 29, 1997, include 27 weeks and 26 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 $1,227,000 and $1,668,000 during the three- and six-month
periods ended April 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 six-month periods ended March 29, 1997,
the Company sold laser systems, components, and related services to
ThermoLase for aggregate revenues of $3,950,000 and $7,830,000,
respectively.
The Company was charged $550,000 and $1,100,000 by ThermoTrex in the
three- and six-month periods ended April 4, 1998, respectively, for
research and development services provided under a license agreement.
The Company was charged $500,000 and $1,000,000 under this agreement in
the three- and six-month periods ended March 29, 1997, respectively.
During the three- and six-month periods ended April 4, 1998, the
Company purchased high-transmission cellular (HTC) grids valued at
$43,000 and $162,000, respectively, from the Tecomet division of Thermo
Electron Corporation, the majority owner of ThermoTrex, under a design
and production arrangement. During the three- and six-month periods ended
March 29, 1997, the Company purchased HTC grids valued at $239,000 and
$482,000, respectively.
8PAGE
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TREX MEDICAL CORPORATION
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 Six Months Ended
------------------- --------------------
(In thousands except April 4, March 29, April 4, March 29,
per share amounts) 1998 1997 1998 1997
------------------------------------------------------------------------
Basic
Net income $ 5,225 $ 3,366 $ 9,586 $ 6,652
------- ------- ------- -------
Weighted average shares 31,771 28,893 30,333 28,759
------- ------- ------- -------
Basic earnings per share $ .16 $ .12 $ .32 $ .23
======= ======= ======= =======
Diluted
Net income $ 5,225 $ 3,366 $ 9,586 $ 6,652
Effect of convertible note 50 50 101 101
------- ------- ------- -------
Income available to common
shareholders, as adjusted $ 5,275 $ 3,416 $ 9,687 $ 6,753
------- ------- ------- -------
Weighted average shares 31,771 28,893 30,333 28,759
Effect of:
Convertible note 679 679 679 679
Stock options 198 151 183 221
------- ------- ------- -------
Weighted average shares,
as adjusted 32,648 29,723 31,195 29,659
------- ------- ------- -------
Diluted earnings per share $ .16 $ .11 $ .31 $ .23
======= ======= ======= =======
The computation of diluted earnings per share excludes the effect of
assuming the exercise of certain outstanding stock options because the
effect would be antidilutive. As of April 4, 1998, there were 323,000 of
such options outstanding, with exercise prices ranging from $15.33 to
$17.40 per share.
9PAGE
<PAGE>
TREX MEDICAL CORPORATION
4. Acquisition
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 such post-closing
adjustment will be material.
The acquisition has been accounted for using the purchase method of
accounting, and the results of operations have been included in the
accompanying financial statements from the date of acquisition. The cost
of this acquisition exceeded the estimated fair value of the acquired net
assets by $7,082,000, which is being amortized over 15 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 allocation. The Company has gathered no information that
indicates the final allocation will differ materially from the
preliminary estimates.
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.
6. Subsequent Event
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
consists of approximately $25,000,000 in cash and the repayment of
approximately $10,000,000 of net debt, subject to a post-closing
adjustment based on final determination of Trophy's book value at the
date of acquisition, and additional consideration, which will not exceed
approximately $8,000,000, if Trophy achieves certain future earnings
targets.
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,
10PAGE
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TREX MEDICAL CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------
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. 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.
Results of Operations
Second Quarter Fiscal 1998 Compared With Second Quarter Fiscal 1997
-------------------------------------------------------------------
Revenues increased 15% to $67.3 million in the second quarter of
fiscal 1998 from $58.6 million in the second quarter of fiscal 1997, due
to increased sales at all of the Company's existing operations. Revenues
increased at XRE primarily due to increased demand for its cardiac
catheterization laboratories, including a $6.7 million sale to a Russian
customer. Increased revenues at Lorad resulting from increased demand for
breast-biopsy systems, mammography system upgrade components, and mobile
X-ray systems were offset in part by a $2.7 million decline in sales of
11PAGE
<PAGE>
TREX MEDICAL CORPORATION
Second Quarter Fiscal 1998 Compared With Second Quarter Fiscal 1997
-------------------------------------------------------------------
(continued)
its laser systems and components to ThermoLase Corporation, a majority-
owned subsidiary of ThermoTrex Corporation. To a lesser extent, revenues
increased as a result of increased demand for Continental's
digital radiographic/fluoroscopic systems and Bennett's mammography
systems.
The gross profit margin increased to 41% in the second quarter of
fiscal 1998 from 37% in the second quarter of fiscal 1997, primarily due
to increased sales of higher-margin products at all 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 increased to 18% in the second quarter of fiscal 1998 from 17%
in the second quarter of fiscal 1997, primarily due to increased selling
expenses as a percentage of revenues at Lorad and XRE. Selling expenses
increased at these operations due to an increase in the sales force and
customer support functions. Research and development expenses increased
to $7.5 million in fiscal 1998 from $6.1 million in fiscal 1997. Research
and development expenses increased primarily at XRE and Lorad 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 $785,000 in the second quarter of fiscal
1998 from $509,000 in the second 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). 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 second quarter of
fiscal 1998 from 47% in the second quarter of fiscal 1997. The effective
tax rate decreased primarily due to the smaller relative impact of
nondeductible expenses as a percentage of pretax income. The effective
tax rate exceeds 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 defending claims in an arbitration proceeding in
which Continuum Electro-Optronics, Inc. is seeking approximately $1.4
million in alleged lost profits under a contract it had with the
Company's Lorad Division to sell laser components to the Company.
Although the Company believes it has adequate defenses to such claims
there can be no assurance as to the outcome of the arbitration.
12PAGE
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TREX MEDICAL CORPORATION
Second Quarter Fiscal 1998 Compared With Second Quarter Fiscal 1997
-------------------------------------------------------------------
(continued)
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 Six Months Fiscal 1998 Compared With First Six Months Fiscal 1997
-----------------------------------------------------------------------
Revenues increased 16% to $131.5 million in the first six months of
fiscal 1998 from $113.6 million in the first six months of fiscal 1997.
Revenues increased $1.5 million as a result of the acquisition of Digitec
Corporation in October 1997 (Note 4). Excluding the impact of revenues
from Digitec, revenues increased 14% in fiscal 1998, primarily due to the
reasons discussed in the results of operations for the second quarter.
The gross profit margin increased to 42% in the first six months of
fiscal 1998 from 38% in the first six months of fiscal 1997, primarily
due to the reasons discussed in the results of operations for the second
quarter.
Selling, general, and administrative expenses as a percentage of
revenues increased to 19% in the first six months of fiscal 1998 from 17%
in the first six months of fiscal 1997, primarily due to increased
selling expenses as a percentage of revenues at Lorad and XRE as
discussed in the results of operations for the second quarter. Research
and development expenses increased to $15.0 million in fiscal 1998 from
$12.3 million in fiscal 1997, primarily due to increased spending at XRE
and Lorad as discussed in the results of operations for the second
quarter.
Interest income increased slightly to $1.2 million in the first six
months of fiscal 1998 from $1.0 million in the first six months of fiscal
1997, primarily due to the reasons discussed in the results of operations
for the second quarter.
13PAGE
<PAGE>
TREX MEDICAL CORPORATION
First Six Months Fiscal 1998 Compared With First Six Months Fiscal 1997
-----------------------------------------------------------------------
(continued)
The effective tax rates were 42% and 47% in the first six months of
fiscal 1998 and 1997, respectively. The effective tax rate decreased,
primarily due to the reasons discussed in the results of operations for
the second quarter.
Liquidity and Capital Resources
Consolidated working capital was $150.1 million at April 4, 1998,
compared with $79.6 million at September 27, 1997. Included in working
capital are cash and cash equivalents of $91.0 million at April 4, 1998,
compared with $36.5 million at September 27, 1997. Net cash used in
operating activities was $3.3 million in the first six months of fiscal
1998. The Company used $12.4 million of cash during the period to fund an
increase in accounts receivable, primarily due to increased sales. To a
lesser extent, accounts receivable increased due to a shift from OEM
sales to direct and dealer sales at XRE and slower customer payment
patterns as a result of increased export sales at Bennett. The Company
used $4.2 million of cash during the period to fund an increase in
inventories, primarily to support the Company's increased sales.
In October 1997, the Company's XRE subsidiary acquired substantially
all of the assets, subject to certain liabilities, of Digitec for
approximately $7.2 million in cash, subject to a post-closing adjustment
(Note 4).
The Company expended $2.0 million for purchases of property, plant,
and equipment in the first six months of fiscal 1998 and expects to make
capital expenditures of approximately $3.9 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.
In April 1998, the Company acquired Trophy for approximately $25.0
million in cash and the repayment of approximately $10.0 million of net
debt, subject to a post-closing adjustment, and additional consideration,
which will not exceed approximately $8.0 million, if Trophy achieves
certain future earnings targets. The Company financed the acquisition
with a portion of the proceeds from its February 1998 sale of common
stock.
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, additional debt or equity financing, and/or short-term
14PAGE
<PAGE>
TREX MEDICAL CORPORATION
Liquidity and Capital Resources (continued)
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. The suit requests a permanent
injunction, treble damages, attorneys' fees, and expenses.
Item 4 - Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
On February 27, 1998, at the Annual Meeting of Stockholders, the
stockholders elected seven incumbent directors to a one-year term
expiring in 1999. The Directors elected at the meeting were: Dr. Elias P.
Gyftopoulos, Mr. Hal Kirshner, Mr. John T. Keiser, Dr. James W. May Jr.,
Ms. Hutham S. Olayan, Mr. Firooz Rufeh, and Mr. Gary S. Weinstein. Dr.
Gyftopoulos received 27,006,670 shares voted in favor of his election and
18,602 shares voted against. Mr. Kirshner received 27,007,253 shares
voted in favor of his election and 18,019 shares voted against. Mr.
Keiser and Dr. May each received 27,005,270 shares voted in favor of his
election and 20,002 shares voted against. Ms. Olayan and Mr. Weinstein
each received 27,007,270 shares voted in favor of his or her election and
18,002 shares voted against. Mr. Rufeh received 27,007,220 shares voted
in favor of his election and 18,052 shares voted against. No abstentions
or broker nonvotes were recorded on the election of directors.
Item 6 - Exhibits
-----------------
See Exhibit Index on the page immediately preceding exhibits.
15PAGE
<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 7th day of May 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
16PAGE
<PAGE>
TREX MEDICAL CORPORATION
EXHIBIT INDEX
Exhibit
Number Description
------------------------------------------------------------------------
27.1 Financial Data Schedule for the quarter ended April 4,
1998.
27.2 Financial Data Schedule for the fiscal year ended
September 28, 1996 (restated for the adoption of
SFAS No. 128).
27.3 Financial Data Schedule for the quarter ended June 28, 1997
(restated for the adoption of SFAS No. 128).
27.4 Financial Data Schedule for the fiscal year ended September
27, 1997 (restated for the adoption of SFAS No. 128).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED APRIL 4, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-03-1998
<PERIOD-END> APR-04-1998
<CASH> 91,011
<SECURITIES> 0
<RECEIVABLES> 58,710
<ALLOWANCES> 1,653
<INVENTORY> 47,881
<CURRENT-ASSETS> 204,092
<PP&E> 24,747
<DEPRECIATION> 8,011
<TOTAL-ASSETS> 307,905
<CURRENT-LIABILITIES> 53,961
<BONDS> 10
0
0
<COMMON> 341
<OTHER-SE> 245,371
<TOTAL-LIABILITY-AND-EQUITY> 307,905
<SALES> 131,468
<TOTAL-REVENUES> 131,468
<CGS> 76,574
<TOTAL-COSTS> 76,574
<OTHER-EXPENSES> 15,045
<LOSS-PROVISION> 373
<INTEREST-EXPENSE> 168
<INCOME-PRETAX> 16,528
<INCOME-TAX> 6,942
<INCOME-CONTINUING> 9,586
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,586
<EPS-PRIMARY> .32
<EPS-DILUTED> .31
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED SEPTEMBER 28, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-END> SEP-28-1996
<CASH> 33,966
<SECURITIES> 0
<RECEIVABLES> 30,368
<ALLOWANCES> 1,264
<INVENTORY> 33,010
<CURRENT-ASSETS> 106,319
<PP&E> 17,259
<DEPRECIATION> 3,489
<TOTAL-ASSETS> 204,061
<CURRENT-LIABILITIES> 46,485
<BONDS> 109
0
0
<COMMON> 286
<OTHER-SE> 149,011
<TOTAL-LIABILITY-AND-EQUITY> 204,061
<SALES> 150,195
<TOTAL-REVENUES> 150,195
<CGS> 86,642
<TOTAL-COSTS> 86,642
<OTHER-EXPENSES> 18,862
<LOSS-PROVISION> 273
<INTEREST-EXPENSE> 1,373
<INCOME-PRETAX> 17,512
<INCOME-TAX> 8,168
<INCOME-CONTINUING> 9,344
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,344
<EPS-PRIMARY> .40
<EPS-DILUTED> .39
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION'S QUARTERLY REPORT ON FORME 10-Q FOR THE PERIOD ENDED JUNE 28, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-END> JUN-28-1997
<CASH> 30,232
<SECURITIES> 0
<RECEIVABLES> 42,875
<ALLOWANCES> 1,291
<INVENTORY> 43,932
<CURRENT-ASSETS> 122,642
<PP&E> 22,068
<DEPRECIATION> 5,539
<TOTAL-ASSETS> 221,577
<CURRENT-LIABILITIES> 49,608
<BONDS> 71
0
0
<COMMON> 289
<OTHER-SE> 163,439
<TOTAL-LIABILITY-AND-EQUITY> 221,577
<SALES> 171,660
<TOTAL-REVENUES> 171,660
<CGS> 105,172
<TOTAL-COSTS> 105,172
<OTHER-EXPENSES> 18,508
<LOSS-PROVISION> 133
<INTEREST-EXPENSE> 252
<INCOME-PRETAX> 19,312
<INCOME-TAX> 9,000
<INCOME-CONTINUING> 10,312
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,312
<EPS-PRIMARY> .36
<EPS-DILUTED> .35
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED SEPTEMBER 27, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-END> SEP-27-1997
<CASH> 36,490
<SECURITIES> 0
<RECEIVABLES> 46,072
<ALLOWANCES> 1,298
<INVENTORY> 43,341
<CURRENT-ASSETS> 131,723
<PP&E> 22,687
<DEPRECIATION> 6,272
<TOTAL-ASSETS> 229,437
<CURRENT-LIABILITIES> 52,074
<BONDS> 47
0
0
<COMMON> 289
<OTHER-SE> 168,805
<TOTAL-LIABILITY-AND-EQUITY> 229,437
<SALES> 229,294
<TOTAL-REVENUES> 229,294
<CGS> 139,062
<TOTAL-COSTS> 139,062
<OTHER-EXPENSES> 24,705
<LOSS-PROVISION> 170
<INTEREST-EXPENSE> 336
<INCOME-PRETAX> 27,464
<INCOME-TAX> 12,790
<INCOME-CONTINUING> 14,674
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,674
<EPS-PRIMARY> .51
<EPS-DILUTED> .50
</TABLE>
