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 January 2, 1999.
[ ] 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 January 29, 1999
---------------------------- -------------------------------
Common Stock, $.01 par value 32,108,142
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
- -----------------------------
TREX MEDICAL CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
January 2, October 3,
(In thousands) 1999 1998
- --------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents (includes $9,100
and $34,054 under repurchase agreement
with affiliated company) $ 13,983 $ 42,709
Accounts receivable, less allowances of
$2,805 and $2,667 69,892 72,622
Inventories:
Raw materials and supplies 39,144 34,316
Work in process 24,793 18,195
Finished goods 22,989 23,757
Prepaid and refundable income taxes 10,189 6,479
Prepaid expenses 3,127 3,154
-------- --------
184,117 201,232
-------- --------
Property, Plant, and Equipment, at Cost 30,337 29,409
Less: Accumulated depreciation and
amortization 11,311 10,310
-------- --------
19,026 19,099
-------- --------
Deferred Charges and Other Assets 904 938
-------- --------
Cost in Excess of Net Assets of Acquired
Companies 120,364 121,252
-------- --------
$324,411 $342,521
======== ========
2
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TREX MEDICAL CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
January 2, October 3,
(In thousands except share amounts) 1999 1998
- --------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 29,609 $ 23,809
Current maturities of long-term obligations 430 435
Accrued payroll and employee benefits 5,961 8,606
Accrued warranty costs 7,849 9,004
Accrued commissions 7,143 7,383
Accrued income taxes 2,018 4,647
Customer deposits 3,215 3,126
Other accrued expenses 16,919 17,170
Due to affiliated companies 2,179 1,112
-------- --------
75,323 75,292
-------- --------
Deferred Income Taxes 435 435
-------- --------
Long-term Obligations:
4.2% Subordinated convertible note,
due to parent company 8,000 8,000
Other 562 631
-------- --------
8,562 8,631
-------- --------
Minority Interest 195 117
-------- --------
Shareholders' Investment:
Common stock, $.01 par value, 50,000,000
shares authorized; 34,139,967 shares
issued 341 341
Capital in excess of par value 213,513 213,513
Retained earnings 40,731 42,222
Treasury stock at cost, 1,545,825 and
5,625 shares (17,085) (94)
Other comprehensive items (Note 4) 2,396 2,064
-------- --------
239,896 258,046
-------- --------
$324,411 $342,521
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
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TREX MEDICAL CORPORATION
Consolidated Statement of Operations
(Unaudited)
Three Months Ended
--------------------------
January 2, January 3,
(In thousands except per share amounts) 1999 1998
- --------------------------------------------------------------------------
Revenues (includes $634 and $489 to
affiliated companies) $64,929 $64,121
------- -------
Costs and Operating Expenses:
Cost of revenues (includes $69 and $219
for revenues to affiliated companies;
Note 2) 39,393 37,110
Selling, general, and administrative
expenses 20,312 12,350
Research and development expenses 8,247 7,503
------- -------
67,952 56,963
------- -------
Operating Income (Loss) (3,023) 7,158
Interest Income 374 446
Interest Expense, Related Party (84) (84)
Other Expense (52) -
------- -------
Income (Loss) Before Income Taxes (2,785) 7,520
Income Tax Provision (Benefit) (1,294) 3,159
------- -------
Net Income (Loss) $(1,491) $ 4,361
======= =======
Basic and Diluted Earnings (Loss) per Share
(Note 3) $ (.04) $ .15
======= =======
Weighted Average Shares (Note 3)
Basic 33,312 28,895
======= =======
Diluted 33,312 29,741
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
4
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1
Consolidated Statement of Cash Flows
(Unaudited)
Three Months Ended
--------------------------
January 2, January 3,
(In thousands) 1999 1998
- --------------------------------------------------------------------------
Operating Activities:
Net income (loss) $ (1,491) $ 4,361
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 2,191 1,491
Provision for losses on accounts
receivable 211 127
Other noncash items (25) -
Changes in current accounts, excluding
the effects of acquisition:
Accounts receivable 3,417 (9,079)
Inventories (9,826) (1,601)
Other current assets (3,591) (1,271)
Accounts payable 5,348 1,954
Other current liabilities (6,989) (1,365)
-------- --------
Net cash used in operating activities (10,755) (5,383)
-------- --------
Investing Activities:
Acquisition, net of cash acquired - (7,174)
Purchases of property, plant, and equipment (1,089) (1,101)
Other (3) -
-------- --------
Net cash used in investing activities (1,092) (8,275)
-------- --------
Financing Activities:
Purchases of Company common stock (16,991) -
Repayment of short-term borrowings and
capital lease obligations (49) -
Other - (15)
-------- --------
Net cash used in financing activities (17,040) (15)
-------- --------
Exchange Rate Effect on Cash 161 -
-------- --------
Decrease in Cash and Cash Equivalents (28,726) (13,673)
Cash and Cash Equivalents at Beginning of
Period 42,709 36,490
-------- --------
Cash and Cash Equivalents at End of Period $ 13,983 $ 22,817
======== ========
Noncash Activities:
Fair value of assets of acquired companies $ - $ 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.
5
<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 January 2, 1999, and the results of
operations and the cash flows for the three-month periods ended January 2, 1999,
and January 3, 1998. The Company's results of operations for the three-month
periods ended January 2, 1999, and January 3, 1998, include 13 weeks and 14
weeks, respectively. Interim results are not necessarily indicative of results
for a full year.
The consolidated balance sheet presented as of October 3, 1998, 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, as amended, for the fiscal year ended
October 3, 1998, filed with the Securities and Exchange Commission.
2. Transactions with Affiliated Companies
Revenues from affiliated companies in the accompanying statement of
operations includes $633,000 and $441,000 during the first quarter of 1999
fiscal and 1998, respectively, for the sale 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 first quarter of fiscal 1999 and 1998, the Company purchased
high-transmission cellular (HTC) grids valued at $340,000 and $119,000,
respectively, from the Tecomet division of Thermo Electron Corporation, the
majority owner of ThermoTrex, under a design and production arrangement.
6
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3. Earnings (Loss) per Share
Basic and diluted earnings (loss) per share were calculated as follows:
Three Months Ended
--------------------------
January 2, January 3,
(In thousands except per share amounts) 1999 1998
- --------------------------------------------------------------------------
Basic
Net Income (Loss) $(1,491) $ 4,361
------- -------
Weighted Average Shares 33,312 28,895
------- -------
Basic Earnings (Loss) per Share $ (.04) $ .15
======= =======
Diluted
Net Income (Loss) $(1,491) $ 4,361
Effect of Convertible Note - 50
------- -------
Income (Loss) Available to Common
Shareholders, as Adjusted $(1,491) $ 4,411
------- -------
Weighted Average Shares 33,312 28,895
Effect of:
Convertible note - 679
Stock options - 167
------- -------
Weighted Average Shares, as Adjusted 33,312 29,741
------- -------
Diluted Earnings (Loss) per Share $ (.04) $ .15
======= =======
The computation of diluted loss per share as of January 2, 1999, excludes
the effect of assuming the conversion of the Company's $8,000,000 principal
amount of 4.2% subordinated convertible note and the effect of assuming the
exercise of outstanding stock options, because the effect would be antidilutive.
At January 2, 1999, there were outstanding options to purchase 1,298,363 shares
of Company common stock at prices ranging from $10.25 to $21.00 per share.
4. Comprehensive Income
During the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This
pronouncement sets forth requirements for disclosure of the Company's
comprehensive income and accumulated other comprehensive items. In general,
comprehensive income combines net income and "other comprehensive items," which
represents foreign currency translation adjustments, reported as a component of
shareholders' investment in the accompanying balance sheet. The Company had a
comprehensive loss of $1,159,000 during the first quarter of fiscal 1999, and
comprehensive income of $4,361,000 during the first quarter of fiscal 1998.
7
<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, as
amended, for the fiscal year ended October 3, 1998, 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 and
specialized X-ray equipment, including imaging systems used during cardiac
procedures such as balloon angioplasty; and dental X-ray systems. The Company
sells its products principally through dealers and direct sales. In addition,
the Company manufactures systems and system components as an original equipment
manufacturer (OEM) for the General Electric Medical Systems division of the
General Electric Company. The Company has five operating units: Lorad, a
manufacturer of mammography and digital breast-biopsy systems; Bennett X-Ray
Corporation, a manufacturer of general-purpose X-ray, mammography, and
breast-biopsy 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 a manufacturer of physiological monitoring equipment and
digital-image archiving and networking systems used in cardiac catheterization
procedures; Continental X-Ray Corporation, a manufacturer of general-purpose and
specialized X-ray systems; and Trophy Radiologie S.A., 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.
8
<PAGE>
Results of Operations
First Quarter Fiscal 1999 Compared With First Quarter Fiscal 1998
Revenues increased to $64.9 million in the first quarter of fiscal 1999 from
$64.1 million in the first quarter of fiscal 1998. Revenues increased $25.0
million as a result of the acquisition of Trophy in April 1998. Excluding
Trophy, revenues decreased $24.2 million. Revenues decreased at Lorad by $13.2
million primarily due to the loss of an OEM contract with United States Surgical
Corporation (U.S. Surgical), which accounted for $11.5 million of revenue in the
fiscal 1998 period. To a lesser extent, revenues decreased at Lorad due to lower
demand for breast-biopsy systems. Revenues decreased at XRE by $4.7 million
primarily due to the delayed shipment of several cardiac catheterization systems
and, to a lesser extent, lower demand. Revenues at Continental decreased due to
a decrease in demand for radiographic/fluoroscopic systems and general-purpose
X-ray systems. Revenues decreased at Bennett primarily due to lower demand for
its general-purpose X-ray systems and, to a lesser extent, a decrease in sales
of its mammography equipment.
The gross profit margin decreased to 39% in the first quarter of fiscal 1999
from 42% in the first quarter of fiscal 1998, primarily due to decreased sales
of higher-margin products at a majority of the Company's operating units, offset
in part by the inclusion of higher-margin revenues at Trophy.
Selling, general, and administrative expenses as a percentage of revenues
increased to 31% in the first quarter of fiscal 1999 from 19% in the first
quarter of fiscal 1998, primarily due to a decrease in revenues at all of the
Company's operations, excluding Trophy. To a lesser extent, selling, general,
and administrative expenses as a percentage of revenues increased due to the
inclusion of Trophy, which has higher costs as a percentage of revenues. During
the second quarter of fiscal 1999, the Company initiated certain actions to
reduce costs in response to lower revenues. These actions include personnel
reductions and closer monitoring of discretionary expenses such as travel,
consultants, and similar costs. The Company does not expect to incur material
obligations for severance as a result of these actions. Research and development
expenses increased to $8.2 million in the first quarter of fiscal 1999 from $7.5
million in the first quarter of fiscal 1998, primarily due to the inclusion of
$2.0 million of expenses at Trophy. This increase was offset in part by the
Company's decision to discontinue funding a license agreement with ThermoTrex
relating to flat-panel direct-detection technology.
Interest income decreased to $374,000 in the first quarter of fiscal 1999
from $446,000 in the first quarter of fiscal 1998, primarily as a result of
lower average invested balances. Interest expense, related party, represents
interest associated with the 4.2% subordinated convertible note issued to
ThermoTrex.
9
<PAGE>
First Quarter Fiscal 1999 Compared With First Quarter Fiscal 1998
(continued)
The effective tax rate was a benefit of 46% in the first quarter of fiscal
1999 compared with an effective rate of 42% in the first quarter of fiscal 1998.
The effective tax rates in both periods 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's expected effective rate for fiscal 1999 increased due to the larger
relative effect of nondeductible expenses.
Liquidity and Capital Resources
Consolidated working capital was $108.8 million at January 2, 1999, compared
with $125.9 million at October 3, 1998. Included in working capital are cash and
cash equivalents of $14.0 million at January 2, 1999, compared with $42.7
million at October 3, 1998. Operating activities used $10.8 million of cash in
the first quarter of fiscal 1999. The Company used $9.8 million of cash during
the period to fund an increase in inventories primarily due to lower than
expected sales. The Company used $7.0 million during the period to reduce other
current liabilities, primarily as a result of federal and state income tax
payments. In connection with the acquisition of U.S. Surgical by Tyco Ltd., and
U.S. Surgical's decision to focus on other areas of its business in January
1999, the Company committed to purchase inventories that had been sold to U.S.
Surgical in prior periods totaling approximately $3.6 million, generally payable
over six quarters, and an additional $4.5 million, which is contingent and
payable on a pro-rata basis upon the Company's resale of the product.
The Company expended $1.1 million for purchases of property, plant, and
equipment in the first quarter of fiscal 1999 and expects to make capital
expenditures of approximately $6.0 million during the remainder of the fiscal
year.
The Company's Board of Directors has authorized the repurchase by the
Company, through various dates ending on December 22, 1999, of up to $25.0
million of its common stock in the open market, or in negotiated transactions.
As of January 2, 1999, the Company had repurchased $17.0 million of its common
stock pursuant to such authorizations, which was funded from working capital.
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.
10
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Year 2000
The Company continues to assess the potential impact of the year 2000 on the
Company's internal business systems, products, and operations. The Company's
year 2000 initiatives include (i) testing and upgrading significant
information-technology systems and facilities; (ii) testing and developing
upgrades, if necessary, for the Company's current products and certain
discontinued products; (iii) contacting key suppliers and vendors to determine
their year 2000 compliance status; and (iv) developing a contingency plan.
The Company's State of Readiness
The Company has implemented a compliance program to ensure that its critical
information-technology systems and facilities will be ready for the year 2000.
The first phase of the program, testing and evaluating the Company's critical
information-technology systems and facilities for year 2000 compliance, is
substantially underway. During phase one, the Company will be testing and
evaluating its significant computer systems, software applications, and related
equipment for year 2000 compliance. The Company is also evaluating the potential
year 2000 impact on its critical facilities. The Company has begun phase two of
its program, during which any noncompliant systems or facilities identified
during phase one are prioritized and remediated. The Company is currently
upgrading or replacing such noncompliant information-technology systems. In many
cases, such upgrades or replacements are being made in the ordinary course of
business, without accelerating previously scheduled upgrades or replacements.
The Company expects that all of its material information- technology systems and
critical facilities will be year 2000 compliant by the end of September 1999.
There can be no assurance that the Company will be able to identify all of the
year 2000 problems with its critical information-technology systems and
facilities.
The Company has also implemented a compliance program to test and evaluate
the year 2000 readiness of the material products that it currently manufactures
and sells. The Company believes that all of such material products are year 2000
compliant. However, as many of the Company's products are complex, interact with
or incorporate third-party products, and operate on computer systems that are
not under the Company's control, there can be no assurance that the Company will
be able to identify all of the year 2000 problems with its current products. The
Company believes that certain of its older products, which it no longer
manufactures or sells, may not be year 2000 compliant nor upgradable to make
them year 2000 compliant. The Company is continuing to test and evaluate such
products. The Company is focusing its efforts on products that are still under
warranty, early in their expected life and/or subject to FDA considerations
related to the year 2000. The Company is offering upgrades and/or identifying
potential solutions where reasonably practicable.
The Company is in the process of identifying and assessing the year 2000
readiness of key suppliers and vendors that are believed to be significant to
the Company's business operations. As part of this effort, the Company has
developed and is distributing questionnaires relating to
11
<PAGE>
Year 2000 (continued)
year 2000 compliance to its significant suppliers and vendors. The Company has
started to follow-up and monitor the year 2000 compliance progress of
significant suppliers and vendors that indicate that they are not year 2000
compliant or that do not respond to the Company's questionnaires. The Company
has not completed the majority of its assessment of third-party risk, but
expects to be substantially completed by September 1999.
Contingency Plan
The Company is developing a contingency plan that will allow its primary
business operations to continue despite disruptions due to year 2000 problems.
This plan may include identifying and securing other suppliers, increasing
inventories, and modifying production facilities and schedules. As the Company
continues to evaluate the year 2000 readiness of its business systems and
facilities, products and significant suppliers, and vendors, it will modify and
adjust its contingency plan as may be required.
Estimated Costs to Address the Company's Year 2000 Issues
To date, costs incurred in connection with the year 2000 issue have not been
material. The Company does not expect total year 2000 remediation costs to be
material, but there can be no assurance that the Company will not encounter
unexpected costs or delays in achieving year 2000 compliance. Year 2000 costs
relating to products and facilities were funded from working capital. All
internal costs and related external costs other than capital additions related
to Year 2000 remediation have been and will continue to be expensed as incurred.
The Company does not track internal costs incurred for its year 2000 compliance
project. Such costs are principally the related payroll costs for its
information systems group.
Risks of the Company's Year 2000 Issues
While the Company is attempting to minimize any negative consequences
arising from the year 2000 issue, there can be no assurance that year 2000
problems will not have a material adverse impact on the Company's business,
operations, or financial condition. While the Company expects that upgrades to
its internal business systems will be completed in a timely fashion, there can
be no assurance that the Company will not encounter unexpected costs or delays.
Despite its efforts to ensure that its material current products are year 2000
compliant, the Company may see an increase in warranty and other claims,
especially those related to Company products that incorporate, or operate using,
third-party software or hardware. In addition, certain of the Company's older
products, which it no longer manufactures or sells, may not be year 2000
compliant, which may expose the Company to claims. If any of the Company's
material suppliers or vendors experience business disruptions due to year 2000
issues, the Company might also be materially adversely affected. There is
expected to be a significant amount of litigation relating to the year 2000
issue and there can be no assurance that the Company will not incur
12
<PAGE>
Year 2000 (continued)
material costs in defending or bringing lawsuits. In addition, if any year 2000
issues are identified, there can be no assurance that the Company will be able
to retain qualified personnel to remedy such issues. Any unexpected costs or
delays arising from the year 2000 issue could have a significant adverse impact
on the Company's business, operations, and financial condition in amounts that
cannot be reasonably estimated at this time.
Item 3 - Quantitative and Qualitative Disclosure About Market Risk
The Company's exposure to market risk from changes in equity prices,
interest rates, and foreign currency exchange rates has not changed materially
from its exposure at fiscal year-end 1998.
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
(b) Reports on Form 8-K
On December 15, 1998, the Company filed a Current Report on Form 8-K with
respect to the resignation of the Company's president and chief executive
officer as well as the Company's anticipated earnings for the first fiscal
quarter.
On December 17, 1998, the Company filed a Current Report on Form 8-K with
respect to its 510(k) application seeking clearance to market its full-field
digital mammography system being withdrawn by the U.S. Food and Drug
Administration.
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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 5th day of February 1999.
TREX MEDICAL CORPORATION
Paul F. Kelleher
------------------------
Paul F. Kelleher
Chief Accounting Officer
Theo Melas-Kyriazi
------------------------
Theo Melas-Kyriazi
Chief Financial Officer
14
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EXHIBIT INDEX
Exhibit
Number Description of Exhibit
10.1* Letter dated January 4, 1999, by and between the Registrant and
United States Surgical Corporation, division of Tyco Ltd.
10.2 Agreement by and between the Registrant and William J. Webb dated as
of January 4, 1999.
10.3 Agreement by and between the Registrant and Hal Kirshner dated as of
February 2, 1999.
27 Financial Data Schedule.
* Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Securities and Exchange Commission.
Exhibit 10.1
January 4, 1999 Private and Confidential
Mr. Larry Heaton, II
President, North America
United States Surgical
150 Glover Avenue
Norwalk, Connecticut 06856
Dear Larry:
I appreciate the time we spent last week in trying to bring the
Stereotactic Table inventory situation to a workable solution for
both companies.
Although this arrangement remains subject to the execution of a
mutually acceptable definitive agreement, below are the items we
discussed to provide for the inventory transfer while preserving
a working relationship between our respective sales and marketing
organizations:
1) Title Transfer Lorad is prepared to take title of
approximately **** Stereotactic tables currently in USSC's
inventory.
2) Payment Terms The purchase price will be $******* per
table for an aggregate of $3,600,000 (the aggregate price to
be adjusted based on actual inventory). The $3,600,000 will
be spread over six quarters starting in March 1999 ($600,000
per quarter, i.e., **** tables each quarter). If more than
**** of the repurchased tables are sold by Lorad in any of
these six quarters, Lorad will pay to USSC the sum of
$****** per table multiplied by the number of tables sold in
excess of ****. Lorad agrees to pay USSC a royalty of
$4,500,000 contingent on resale of the tables, payable as
each table is sold at a rate of $****** per table. Damaged
tables purchased by Lorad will be assessed accordingly for
adjustments requiring parts replacement.
3) Releases Lorad will release USSC from the royalty payment
obligations as set forth in the March 26, 1998 amendment to
the October 1995 Distributor Agreement effective
****************. Lorad will also release USSC from certain
current outstanding debt payments owed to Lorad valued at
$******. All other USSC debt owed to Lorad will be paid in
the ordinary course of business. USSC will acknowledge it
has no claim against or right to *********** in respect of
the tables held in USSC inventory. USSC will release Lorad
from any debt or other obligations owed to USSC, including
those set forth in the March 26, 1998 amendment to the
October 1995 Distributorship Agreement.
4) Trade Shows Lorad will work with USSC providing set up,
installation and shipment of Stereotactic tables for a
number of trade shows to be agreed upon, at the expense of
******.
5) Support - Lorad will provide systems and product support to
participate at USSC training services and symposiums at USSC
Breast Care workshops, at the expense of ******.
6) VHA Systems - USSC will keep monies from sales of tables to
the VHA. USSC will be entitled to buy complete Stereotactic
tables from Lorad at a price of $********/table, for sale to
the VHA, for a period of **** months. Tables sold by Lorad
to USSC for this purpose will be supplied from the tables
repurchased from USSC inventory.
7) Installed Base - Lorad will work with USSC to develop
programs for MIBB upgrades to its installed base, at the
expense of ******.
8) Business Relationship - Lorad and USSC will work together
to develop a plan to educate their respective sales forces
and the Lorad Dealer Distribution network regarding the new
Lorad/USSC relationship. This plan will set forth clearly
defined roles and responsibilities to facilitate sales of
qualified prospects. USSC will compensate USSC table
specialists and full line representatives for table
prospects that result in sales of tables through Lorad.
Lorad will not owe any commissions in respect of any such
sales.
I believe this covers the salient points of our discussion. I
would suggest we identify a point person from each organization
to coordinate definitive legal documents, which would govern the
purchase of the tables and the other points outlined above. Once
finalized, these new documents would supercede the October 1995
Distributorship Agreement, as amended to date by the letter
agreement dated March 19, 1996, the amendment to Distributorship
Agreement dated March 26, 1998, and the Amended Agreement dated
July 2, 1998 and the letter agreement dated April 25, 1996 and
August 20, 1988.
In the meantime, I believe it would be in our respective best
interests to proceed as quickly as possible to take steps in
preparation of this proposed shift in sales roles before any
further relationships are damaged.
Thanks again for your assistance in bringing this situation to a
workable solution.
This letter supercedes our earlier letter to you dated December
31, 1998.
Sincerely,
Lorad division, Trex Medical Corporation
/s/ John M. Brenna
John M. Brenna, President
AGREED:
US SURGICAL CORPORATION, division of TYCO Ltd.
By: /s/ Larry Heaton, President, NA
Name:
Title:
Date: 1/6/99
Exhibit 10.2
December 22, 1998
Mr. William J. Webb
2635 Derbyshire Road
Cleveland Heights, OH 44106
Dear Bill:
I am pleased to confirm our conversations and extend an employment offer to you,
beginning January 4, 1999. Also, I plan to recommend to the Board of Directors
to appoint you as President and Chief Executive Officer, of our subsidiary Trex
Medical Corporation.
In your position, your staring salary will be $20,833.33 monthly ($250,000
annualized) and you will report directly to me.
You will participate in Trex Medical's management bonus plan which provides you
the opportunity to earn additional compensation based on individual and company
performance toward assigned objectives. Your reference bonus is $110,000 subject
to a multiplier of 0-2 times based on a combination of subjective and objective
factors, the details of which will be provided to you. You will receive a
minimum bonus at the rate of $200,000 per year for the calendar years 1999 and
2000 paid quarterly in arrears. To be eligible for a quarterly bonus payment,
you must be actively employed at the end of the calendar year.
In addition, you will receive a sign-on bonus of $60,000. This bonus will be
paid to you after the completion of 90 days of employment.
I intend to recommend that the Human Resources Committee of the appropriate
board of directors approve the grant to you of options to purchase shares of
stock in the following companies:
Trex Medical 400,000 shares
Thermo Trex 70,000 shares
Thermo Electron 40,000 shares
The stock options will be at market value as of the date of the grant. The
length of the options are 7 years, vesting over 5 years. Other terms of these
options are detailed in the enclosed Summary of Terms. All stock options are
subject to all terms and conditions of the stock option agreements which will be
given to you when approved. As an executive officer of Trex Medical you will be
required to comply with applicable laws and regulations relating to transactions
involving the stock of Thermo Electron and its subsidiaries, including
applicable securities laws and regulations. You will also be required to comply
with applicable policies and procedures of Thermo Electron and its subsidiaries
relating to ownership of and transactions involving the stock of Thermo Electron
and its subsidiaries, including policies and procedures relating to the
pre-clearance of transactions and the exercise of stock options. Thermo Electron
may impose minimum shareholding requirements with respect to particular officers
and may require those shares to be held for indeterminate periods of time.
Thermo Electron management may impose additional restrictions or manage timing
relating to transactions involving shares of Thermo Electron and its
subsidiaries and the exercise of stock options.
You will be eligible to participate in Trex Medical's executive automobile
program which provides you with an automobile cash allowance. Under the program
you will receive a quarterly automobile allowance paid in arrears for $2,625.
Since it will be necessary for you to relocate to the Danbury, CT area you will
be provided with relocation assistance as outlined in the enclosed attachment.
You will be eligible upon employment to participate in the Company's standard
employee benefit programs being provided to Trex Medical's management personnel.
Information related to these programs will be provided under separate cover.
In accordance with our standard employment practice, you will be required to a
sign a Company Information and Invention Agreement, as well as an acknowledgment
of company policies on Drugs and Alcohol In The Workplace, Business Conduct and
Sexual Harassment. Copies of which will also be provided under separate
cover.
Your employment status with Trex Medical is "at will" which means that your
employment is not guaranteed for any definite period of time and may be
terminated by you or Trex Medical at any time for any reason with or without
cause or advance notice. Your employment status may not be altered except by
written agreement signed by me.
<PAGE>
I look forward to having you join us and I am confident that you will be an
excellent addition to the Thermo family.
After your review, please telephone me if you have any questions.
Very truly yours,
/s/ Gary S. Weinstein
Gary S. Weinstein
President and CEO
Thermo Trex Corporation
Agreed to:
/s/ William J. Webb
William J. Webb
Date: January 4, 1999
SUMMARY OF TERMS*
NONQUALIFIED STOCK OPTION - Type A - 7 Year
- ---------------------------------------------------------------------
Length of Option: 7 years from the date of grant
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Vesting Schedule: Deemed to vest 20% per year,
beginning with the first
anniversary of the grant date
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
May be Exercised: Any time after grant date and
before end of term
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Payment of Exercised Check payable to Company that
Shares: granted the option
Trade previously-owned shares (Must have
been owned for 6 months if such shares were
acquired by the exercise of an option.)
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Resale Restrictions: Exercised shares may not be
transferred or sold to parties
other than the Company until vested.
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Tax Treatment of Exercised Difference between the exercise
Shares: price and the fair market value
of vested shares on the exercise
date is considered Ordinary
Income.
Ordinary Income is measured on non-vested
shares when they vest (anniversary of the
grant date).
Tax withholding requirement:
FEDERAL: Minimum 28%
STATE: Statutory Rate
FICA: Statutory Rates up to
Specified Limits
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Payment of Taxes: Check payable to employer
Company
"Stock Withholding"
Surrender previously-owned
shares
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Rights on Termination: Vested Options may be exercised
Voluntary, Discharge, within 90 days of termination;
Release Non-vested and unexercised options
Retirement or Disability . are forfeited; Non-vested but
. . . . . . . . exercised options must be sold back
to the Company at cost.
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Death . . . . . . . . . Vested options may be exercised, by
. . . . . . . . . . . . . . . the optionee's heirs, within 180
days of death; Non-vested and
unexercised options are forfeited;
Non-vested but exercised options
must be sold back to the Company at
cost.
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Special extension of If your date of termination occurs
time of within 180 days before Section 12
Section 12 Registration Registration, you may exercise
. . . . . . . . . . vested options (as of the date of
your termination) between 90 days
and 120 days after Section 12
Registration.
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
* This summary is qualified in its entirety to the terms and
conditions of the written and signed
option agreement between the optionee and the Company.
- ---------------------------------------------------------------------
WILLIAM J. WEBB
Relocation Assistance Program
A. Trex Medical Corporation (the "Company") will provide relocation expenses
for you related to your move to the Danbury, CT area on the terms below.
B. When selling your home, you are responsible for handling all arrangements
and details with respect to the sale and closing of the title related to
your home. The Company will not purchase or otherwise acquire title to
your residence.
C. After your primary residence has been sold, the following relocation
expenses will be paid by the Company:
1. Broker commission related to the sale of your primary residence up to
5% of the selling price.
2. Normal closing costs and attorneys' fees covering the sale of your
present home.
3. Normal closing costs covering the purchase of a new home excluding
origination fees (points) related to obtaining a new mortgage.
4. Costs of packing and moving of normal household goods, including up
to 2 automobiles.
5. Storage of goods, if necessary, for up to ninety (90) days.
6. Tolls and mileage for use of personal automobiles that are driven to
the new residence.
7. Reasonable travel expenses for your family when moving to your new
residence.
8. Necessary pre-move trips of you and your wife to look for housing at
the new location, up to a maximum of three (3) trips.
9. Temporary and necessary rental housing expenses for you pending your
family's move to the new location for a period usually up to 6
months.
D. The Company's payment of these relocation expenses, with
the exception of items 4, 6 and 7, will be included in your
gross income for income tax purposes, and such, will be
reported as wages on your W-2 statement at year-end. To
help offset the additional taxes due related to these
relocation payments, the Company will add a one-time payment
equal to 40% of items 1, 2, 3, 5, 8 and 9 to your gross
wages.
Additional Agreements: W J Webb and G. Weinstein
1) Severance pay: One year salary and bonus, minimum of $450,000.
2) Gross up of relocation expenses at 66%.
3) Broker's fee reimbursement of 6%.
4) Life insurance at $900,000 ($450,000), including Trex
Medical standard.
5) Interest free loan to purchase $360,000 of Trex Medical
stock.
6) Assistance with new home down payment, if requested.
Exhibit 10.3
February 2, 1999
Mr. Hal Kirshner
25 Lords Highway
Weston, Connecticut 06883
Dear Hal:
This letter confirms our arrangement regarding your
resignation as President and Chief Executive Officer of Trex
Medical Corporation (the "Company") and as an officer and
director of any of its subsidiaries or affiliates, and your
subsequent appointment as a consultant to the Company.
The following is our agreement related to your resignation
from the Company:
1. Termination of Employment: Your employment with the
Company will be terminated effective as of December 31, 1998
(the "Employment Termination Date"). You will be paid your
regular salary through the Employment Termination Date.
2. 1998 Bonus: You will be paid a final bonus of $100,000
for the 1998 calendar year payable at such time as such
bonuses are normally paid.
3. Accrued Vacation: You will be paid one week accrued but
unused vacation time which you had earned through the
Employment Termination Date. You will not continue to earn
vacation or other paid time off after the Employment
Termination Date.
4. Full Payment: You agree that all payments provided to
you under paragraphs 1, 2 and 3 of this Agreement are in
complete satisfaction of any and all compensation due to you
from the Company through the Employment Termination Date.
You agree to reimburse the Company for all personal expenses
due and owing to the Company as of the Employment
Termination Date.
5. Employee Benefit Programs: Your participation in all
employee benefit programs of the Company shall cease as of
the Employment Termination Date in accordance with the terms
of those programs. You will have the option to elect to
continue your health care coverage under COBRA beginning
January 1, 1999 for a period ending 18 months after the
Employment Termination Date, provided you pay the full
monthly premium cost of your coverage under the applicable
health care plans. Detailed information will be provided to
you under separate cover. You will also have the option, at
your sole expense, of converting your basic life insurance
coverage to an individual plan through Prudential. If
interested, please let us know by February 15, 1999 and
conversion information will be furnished to you. A
conversion option is not available for long term disability
coverage.
6. Money Match Plus Plan: Your active participation in
the Money Match Plus Plan shall end on the Employment
Termination Date. Information will be provided to you
regarding various election options available to you
regarding your account.
7. Stock Options: So long as you remain a director of
the Company, you shall be entitled to retain your stock
options in the Company and any of its subsidiaries and
affiliates, subject to the terms and conditions of such
options. Once you cease to be a director of the Company,
your stock options will no longer vest and no further
lapsing of the Company's and its subsidiaries' and
affiliates repurchase rights will occur. You will then
have 90 days to exercise your vested options. If you do not
exercise your vested options by the specified deadline, your
options will be canceled, and you will have no further
rights with respect to your options.
8. Taxes: All payments by the Company under this
Agreement will be reduced by all taxes and other amounts
that the Company is required to withhold under applicable
law and all other deductions authorized by you.
9. Consulting Services: You agree to provide, and make
yourself available to provide, consulting services to the
Company, on a per diem basis at such time or times as is
mutually agreeable by the parties. The term of this
consulting arrangement shall commence on January 1, 1999 and
terminate on December 31, 2000. You agree to use your best
efforts, business judgment and skill in rendering consulting
services hereunder. This Agreement shall not prohibit you
from engaging in other business activities, except as
otherwise provided under paragraph 14 hereof, during the
consulting period provided that such other activities do not
prevent you from performing your obligations under this
consulting arrangement. It is expressly agreed that you are
acting as an independent contractor in performing your
services hereunder and not as an employee or agent of the
Company and as such will not be treated as an employee for
any reason whatsoever, including but not limited to federal
or state tax purposes. In the event of your death,
disability or other incapacity resulting in your inability
to perform your consulting duties hereunder all compensation
due and owing under paragraph 10 hereof shall cease.
Further, the Company may terminate your consulting
arrangement for Cause and, in such event, in addition to any
other remedies it may have, the Company shall have no
obligation to make any further payments to you under
paragraph 10 hereof. "Cause" shall mean your (a) conviction
of a felony, or a misdemeanor involving material fraud or
material dishonesty, (b) material fraud or material
dishonesty in the course of your employment with the Company
or during the course of your consulting hereunder, and (c)
misconduct that is materially injurious to the Company or
its subsidiaries and affiliates.
10. Additional Compensation: In consideration for your
release pursuant to paragraph 12 hereof and for your
agreement to provide consulting services, the Company shall
pay you at the rate of $225,000 per year during the term of
the consulting arrangement, payable monthly in arrears.
However, you will not be entitled to receive any cash
compensation for your service as a director of the Company.
11. Company Property: You will return to the Company any
and all documents, materials and information related to the
Company, or its subsidiaries, affiliates or businesses, and
all other property of the Company, including, without
limitation, credit cards, phone and other charge cards, car
phones, fax machines and other equipment, files and personal
computers in your possession or control, on or before
February 10, 1999, provided, however, you may purchase the
Company's car phones and fax machines in your possession for
a purchase price equal to their book value. Further, you
agree that on and after February 2, 1999 you will not for
any purpose attempt to access or use any Company computer or
computer network or system, including without limitation its
electronic mail system.
12. Release: In exchange for the consideration described
in paragraph 10 hereof, you hereby release and discharge
Thermo Electron Corporation and its subsidiaries and
affiliates, including the Company, and each of their
respective current, former or future officers, directors,
employees, agents, representatives and legal predecessors
and successors from all claims, liabilities and causes of
action, whether known or unknown, which you have, may have,
or claim to have against any of them, including without
limitation those based upon or arising out of your
employment with the Company, the termination of your
employment and other relationships with the Company, your
service as an officer, director or shareholder of Thermo
Electron Corporation or any of its subsidiaries or
affiliates, including the Company, and any of such
companies' policies, procedures or requirements. You hereby
agree not to file any lawsuit to assert such claims, which
include, but are not limited to, any claims for breach of
contract, wrongful termination or age, sex, race, disability
or other discrimination under the Civil Rights Act of 1964,
as amended, the Connecticut Fair Employment Practices Act,
the Age Discrimination in Employment Act of 1967 or other
federal, state or local laws prohibiting such discrimination
or under any other federal, state or local employment laws.
YOU UNDERSTAND THAT YOU HAVE BEEN ADVISED TO SEEK THE ADVICE
OF AN ATTORNEY, IF YOU SO CHOOSE, PRIOR TO SIGNING THIS
RELEASE AND THAT TO THE EXTENT DESCRIBED HEREIN YOU ARE
GIVING UP ANY LEGAL CLAIMS YOU HAVE AGAINST THERMO ELECTRON
CORPORATION AND ITS SUBSIDIARIES AND AFFILIATES, INCLUDING
THE COMPANY, AND EACH OF THEIR RESPECTIVE CURRENT, FORMER
OR FUTURE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
REPRESENTATIVES, LEGAL PREDECESSORS AND SUCCESSORS BY
SIGNING THIS RELEASE. YOU FURTHER UNDERSTAND THAT YOU MAY
HAVE 21 DAYS TO CONSIDER THIS AGREEMENT, THAT YOU MAY REVOKE
IT AT ANY TIME DURING THE SEVEN DAYS AFTER YOU SIGN IT, AND
THAT IT WILL NOT BECOME EFFECTIVE UNTIL THE 7-DAY REVOCATION
PERIOD HAS PASSED. YOU FULLY UNDERSTAND YOUR RIGHTS TO TAKE
21 DAYS TO CONSIDER SIGNING THIS RELEASE AND, AFTER HAVING
SUFFICIENT TIME TO CONSIDER YOUR OPTIONS, YOU HEREBY WAIVE
YOUR RIGHT TO TAKE THE FULL 21-DAY PERIOD. YOU ACKNOWLEDGE
THAT YOU ARE SIGNING THIS RELEASE KNOWINGLY, WILLINGLY AND
VOLUNTARILY IN EXCHANGE FOR THE CONSIDERATION DESCRIBED IN
PARAGRAPH 10 HEREIN.
13. Restriction on Purchase or Sale of Common Stock: You
understand that you will continue to be a "Reporting
Person," for purposes of Section 16 of the Securities
Exchange Act of 1934 and the rules and regulations
promulgated thereunder, and you will remain subject to
insider trading regulations under the federal securities
laws for as long as you remain a director of the Company and
for a period of six months following the termination of such
position and that you are required to preclear transactions
in the Company and its affiliates' securities with the
Company's Stock Transaction Coordinator, Ms. Pauline I.
Northern. You are also urged to contact the Corporate
Secretary of the Company, Ms. Sandra L. Lambert, should you
have any questions regarding compliance with the insider
trading regulations under the federal securities laws.
14. Non-Compete. For the period beginning on the
Employment Termination Date and ending on December 31, 2000
(the "Non-Compete Period"), you shall not, either directly
or indirectly as a stockholder, investor, partner, director,
officer, employee or consultant, compete or engage in any
business that competes, anywhere in the world, with the
business of the Company or any of its direct or indirect
subsidiaries or any affiliates of the Company in which the
Company has a direct or indirect equity interest, it being
understood that providing consulting services to, or serving
as a director of, a corporation that develops, manufactures
or sells products that are merely complimentary to, but are
not substitutes or replacements for, the Company's products
shall not be deemed competition for purposes of this
paragraph 14. You agree that the duration and geographic
scope of this non-competition provision are reasonable. In
the event that any court determines that the duration or
geographic scope, or both, are unreasonable and that such
provision is to that extent unenforceable, the parties agree
that the provision shall remain in full force and effect for
the greatest time period and in the greatest geographic area
that would not render it unenforceable. The parties intend
that this non-competition provision shall be deemed a series
of separate covenants, one for each and every county of each
and every state of the U.S. and each and every political
subdivision of each and every country outside of the U.S.
where this provision is intended to be effective. Further,
during the Non-Compete Period, you hereby agree you shall
not, either directly or indirectly as a stockholder,
investor, partner, director, officer, employee or otherwise,
solicit or attempt to induce any employee of the Company or
any of its subsidiaries or affiliates to terminate his or
her employment with such entity, or attempt to induce any
customer or supplier of the Company or any of its
subsidiaries or affiliates to terminate its relationship
with such entity.
15. Resignation. You hereby resign effective as of
December 13, 1998 your positions as President and Chief
Executive Officer of the Company and effective as of January
1, 1999 all of your other positions as an officer and
director of all of the Company's subsidiaries and affiliates.
16. Non-Disparagement: You agree that you will continue to
support and promote the interests of Thermo Electron
Corporation and its subsidiaries and affiliates, including
the Company, and that you will not criticize, disparage,
defame or in any way comment negatively to anyone about
Thermo Electron Corporation or its subsidiaries or
affiliates, including the Company, or any of the people or
organizations connected with them, or do or say anything
that could disrupt the good morale of the employees of the
Company or otherwise harm the interests or reputation of
Thermo Electron Corporation and its subsidiaries and
affiliates, including the Company, and any of the
organizations or people connected with them. Nothing in this
provision shall prevent you from (i) complying with
compulsory legal process or otherwise making disclosures in
connection with litigation or administrative proceedings,
(ii) making such disclosures as are necessary to obtain
legal advice, (iii) making disclosures as are required by
federal, state or local regulatory authorities, and (iv)
making disclosures which by law are required or cannot be
prohibited.
17. Cooperation: You agree to reasonably cooperate with the
Company with respect to all matters arising during or
related to your employment, including but not limited to
cooperation in connection with any governmental
investigation, litigation or regulatory or other proceeding
which may have arisen or which may arise following the
signing of this Agreement.
18. Waiver of Jury Trial: Each of the parties hereby
expressly, knowingly and voluntarily waives all benefit and
advantage of any right to a trial by jury, and each agrees
that he or it will not at any time insist upon, or plead or
in any manner whatsoever claim or take the benefit or
advantage of, a trial by jury in any action arising in
connection with this Agreement.
19. Entire Agreement: This letter contains the entire
Agreement between you and the Company and replaces all prior
and contemporaneous agreements, communications and
understandings, whether written or oral, with respect to
your resignation, and employment and its termination and
all related matters other than your Information and
Invention Agreement with the Company. This Agreement will
be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts without regard to
choice of law provisions.
20. Severability: If one or more provisions of this
Agreement are held to be unenforceable under applicable law,
such provision shall be excluded from this Agreement and
replaced with a provision which is enforceable and comes
closest to the intent of the parties underlying the
unenforceable provision.
21. Relief: In the event of breach of the provisions of
this Agreement by any party, in addition to any other rights
that the other parties may have under law or in equity, each
party shall have the right to specific performance and
injunctive relief, it being acknowledged and agreed that
money damages will not provide an adequate remedy. In the
event litigation is brought with respect to this Agreement,
the prevailing party shall be entitled to recover from the
losing party his or its reasonable attorney's fees and
expenses.
22. Successors and Assigns: No party hereto may
assign any of its rights under this Agreement without the
prior written consent of the other party. This Agreement is
binding on each of the parties' permitted assigns,
successors in interest, heirs, administrators and executors.
23. Voluntary Agreement: In signing this Agreement,
you give the Company assurance that you have signed it
voluntarily and with a full understanding of its terms and
that you have had sufficient opportunity to consider this
Agreement and to consult with anyone of your choosing before
signing it. If the terms of this Agreement are acceptable
to you, please sign and return it to the undersigned. At
the time you sign and return this Agreement, it will take
effect as a legally-binding agreement between you and the
Company on the basis set forth above.
Date Received by Addressee: February 2, 1999
TREX MEDICAL CORPORATION
By: /s/ Gary S. Weinstein
Title: Chairman
Accepted and Agreed to:
/s/ Hal Kirshner
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TREX MEDICAL
CORPORATION REPORT ON FORM 10-Q FOR THE QUARTER ENDED JANUARY 2, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-02-1999
<PERIOD-END> JAN-02-1999
<CASH> 13,983
<SECURITIES> 0
<RECEIVABLES> 72,697
<ALLOWANCES> 2,805
<INVENTORY> 86,926
<CURRENT-ASSETS> 184,117
<PP&E> 30,337
<DEPRECIATION> 11,311
<TOTAL-ASSETS> 324,411
<CURRENT-LIABILITIES> 75,323
<BONDS> 562
0
0
<COMMON> 341
<OTHER-SE> 239,555
<TOTAL-LIABILITY-AND-EQUITY> 324,411
<SALES> 64,929
<TOTAL-REVENUES> 64,929
<CGS> 39,393
<TOTAL-COSTS> 39,393
<OTHER-EXPENSES> 8,247
<LOSS-PROVISION> 211
<INTEREST-EXPENSE> 84
<INCOME-PRETAX> (2,785)
<INCOME-TAX> (1,294)
<INCOME-CONTINUING> (1,491)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,491)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
