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 June 28, 1997.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 1-13104
THERMOLASE CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 06-1360302
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10455 Pacific Center Court
San Diego, California 92121-4339
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 622-1000
Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter
period that the Registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate the number of shares outstanding of each of
the issuer's classes of Common Stock, as of the
latest practicable date.
Class Outstanding at July 25, 1997
---------------------------- ----------------------------
Common Stock, $.01 par value 39,559,337
PAGE
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
THERMOLASE CORPORATION
Consolidated Balance Sheet
(Unaudited)
Assets
June 28, September 28,
(In thousands) 1997 1996
-----------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 6,084 $ 7,923
Available-for-sale investments, at quoted
market value (amortized cost of $2,009
and $44,205) 1,989 44,132
Accounts receivable, less allowances of
$452 and $319 4,582 4,572
Inventories:
Raw materials and supplies 925 1,521
Work in process and finished goods 2,766 2,748
Prepaid expenses 1,230 408
Prepaid income taxes - 1,882
------- -------
17,576 63,186
------- -------
Property and Equipment, at Cost (Note 2) 43,307 21,343
Less: Accumulated depreciation and
amortization 4,722 2,020
------- -------
38,585 19,323
------- -------
Long-term Prepaid Income Taxes 6,607 -
------- -------
Other Assets 5,444 4,679
------- -------
Cost in Excess of Net Assets of Acquired Company 8,155 8,332
------- -------
$76,367 $95,520
======= =======
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THERMOLASE CORPORATION
Consolidated Balance Sheet (continued)
(Unaudited)
Liabilities and Shareholders' Investment
June 28, September 28,
(In thousands except share amounts) 1997 1996
------------------------------------------------------------------------
Current Liabilities:
Accounts payable $ 3,575 $ 5,179
Accrued payroll and employee benefits 2,007 1,008
Deferred revenue 1,916 913
Other accrued expenses 4,160 1,791
Due to parent company and affiliated
companies 4,185 7,098
-------- --------
15,843 15,989
-------- --------
Deferred Lease Liability 1,255 494
-------- --------
Common Stock Subject to Redemption (Note 3) 40,500 -
-------- --------
Shareholders' Investment (Note 3):
Common stock, $.01 par value, 100,000,000
shares authorized; 40,807,932 and
40,803,932 shares issued 408 408
Capital in excess of par value 47,276 85,813
Accumulated deficit (12,337) (3,516)
Treasury stock at cost, 1,248,595 and
116,570 shares (16,566) (3,621)
Net unrealized loss on
available-for-sale investments (12) (47)
-------- --------
18,769 79,037
-------- --------
$ 76,367 $ 95,520
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
3PAGE
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THERMOLASE CORPORATION
Consolidated Statement of Operations
(Unaudited)
Three Months Ended
------------------
June 28, June 29,
(In thousands except per share amounts) 1997 1996
-----------------------------------------------------------------------
Revenues:
Product revenues $ 5,888 $ 4,821
Service revenues 7,012 1,493
------- -------
12,900 6,314
------- -------
Costs and Operating Expenses:
Cost of product revenues 4,073 3,312
Cost of service revenues 5,892 1,189
Selling, general, and administrative expenses 6,608 2,128
Research and development expenses 1,856 823
------- -------
18,429 7,452
------- -------
Operating Loss (5,529) (1,138)
Interest Income 223 881
Gain on Sale of Investments - 115
Equity in Losses of Joint Ventures (350) -
------- -------
Loss Before Income Taxes (5,656) (142)
Income Tax Benefit 1,923 120
------- -------
Net Loss $(3,733) $ (22)
======= =======
Loss per Share $ (.09) $ -
======= =======
Weighted Average Shares 39,792 40,460
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
4PAGE
<PAGE>
THERMOLASE CORPORATION
Consolidated Statement of Operations
(Unaudited)
Nine Months Ended
----------------------
June 28, June 29,
(In thousands except per share amounts) 1997 1996
------------------------------------------------------------------------
Revenues:
Product revenues $ 18,445 $ 18,103
Service revenues 14,731 2,631
-------- --------
33,176 20,734
-------- --------
Costs and Operating Expenses:
Cost of product revenues 12,480 11,705
Cost of service revenues 13,956 2,359
Selling, general, and administrative expenses 16,874 7,226
Research and development expenses 4,158 2,409
-------- --------
47,468 23,699
-------- --------
Operating Loss (14,292) (2,965)
Interest Income 1,277 2,726
Gain on Sale of Investments - 115
Equity in Losses of Joint Ventures (350) -
-------- --------
Loss Before Income Taxes (13,365) (124)
Income Tax (Provision) Benefit 4,544 (57)
-------- --------
Net Loss $ (8,821) $ (181)
======== ========
Loss per Share $ (.22) $ -
======== ========
Weighted Average Shares 40,352 40,242
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
5PAGE
<PAGE>
THERMOLASE CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)
Nine Months Ended
---------------------
June 28, June 29,
(In thousands) 1997 1996
-----------------------------------------------------------------------
Operating Activities:
Net loss $ (8,821) $ (181)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,908 897
Provision for losses on accounts receivable 134 12
Gain on sale of investments - (115)
Increase in prepaid income taxes (4,725) (60)
Increase in deferred lease liability 761 -
Equity in losses of joint ventures 350 -
Changes in current accounts:
Accounts receivable (143) 262
Inventories 577 1,271
Other current assets (841) (4)
Accounts payable (1,605) (933)
Other current liabilities 1,460 5,470
-------- --------
Net cash provided by (used in) operating
activities (9,945) 6,619
-------- --------
Investing Activities:
Purchases of available-for-sale investments - (49,500)
Proceeds from maturities of available-for-
sale investments 41,500 48,525
Proceeds from sale of available-for-sale
investments - 615
Purchases of property and equipment (21,965) (7,323)
Investment in other assets (1,144) (4,400)
Other 697 630
-------- --------
Net cash provided by (used in) investing
activities 19,088 (11,453)
-------- --------
Financing Activities:
Net proceeds from issuance of Company common
stock and sale of put options 492 2,590
Repurchases of Company common stock (11,268) -
Net proceeds from stock exchange offer (Note 3) 522
Payment of withholding taxes related to stock
option exercises (728) (2,227)
-------- --------
Net cash provided by (used in) financing
activities (10,982) 363
-------- --------
Decrease in Cash and Cash Equivalents (1,839) (4,471)
Cash and Cash Equivalents at Beginning of Period 7,923 13,146
-------- --------
Cash and Cash Equivalents at End of Period $ 6,084 $ 8,675
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
6PAGE
<PAGE>
THERMOLASE CORPORATION
Notes to Consolidated Financial Statements
1. General
The interim consolidated financial statements presented have been
prepared by ThermoLase 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 June
28, 1997, the results of operations for the three- and nine-month periods
ended June 28, 1997, and June 29, 1996, and the cash flows for the
nine-month periods ended June 28, 1997, and June 29, 1996. Interim
results are not necessarily indicative of results for a full year.
The consolidated balance sheet presented as of September 28, 1996,
has been derived from the consolidated financial statements that have
been audited by the Company's independent public accountants. The
consolidated financial statements and notes are presented as permitted by
Form 10-Q and do not contain certain information included in the annual
financial statements and notes of the Company. The consolidated financial
statements and notes included herein should be read in conjunction with
the financial statements and notes included in the Company's Annual
Report on Form 10-K, as amended, for the fiscal year ended September 28,
1996, filed with the Securities and Exchange Commission.
2. Related-party Transaction
During the nine months ended June 28, 1997, the Company purchased
laser systems from Trex Medical Corporation, a majority-owned subsidiary
of ThermoTrex Corporation, the Company's parent, at an aggregate cost of
$10,427,000.
3. Common Stock Subject to Redemption
On April 2, 1997, the Company completed an exchange offer whereby its
shareholders had the opportunity to exchange one share of existing
Company common stock and $3.00 for a new unit consisting of one share of
Company common stock and one redemption right. The redemption right
entitles the holder to sell the related share of common stock to the
Company for $20.25 during the period from April 3, 2001, through April
30, 2001. The redemption right will expire and become worthless if the
closing price of Company common stock is at least $26.00 for 20 of any 30
consecutive trading days. In connection with this offer, the Company
issued in April 1997, 2,000,000 units in exchange for 2,261,706 shares of
Company common stock and $522,000 in cash, net of expenses. As a result
of these transactions, the Company reclassified $40,500,000 from
"Shareholders' investment" to "Common stock subject to redemption," based
on the issuance of 2,000,000 redemption rights each carrying a maximum
liability to the Company of $20.25.
7PAGE
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THERMOLASE CORPORATION
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-looking statements, within the meaning of Section 21E of the
Securities Exchange Act of 1934, are made throughout this Management's
Discussion and Analysis of Financial Condition and Results of Operations.
For this purpose, any statements contained herein that are not statements
of historical fact may be deemed to be forward-looking statements.
Without limiting the foregoing, the words "believes," "anticipates,"
"plans," "expects," "seeks," "estimates," and similar expressions are
intended to identify forward-looking statements. There are a number of
important factors that could cause the results of the Company to differ
materially from those indicated by such forward-looking statements,
including those detailed under the caption "Forward-looking Statements"
in Exhibit 13 to the Company's Annual Report on Form 10-K, as amended,
for the fiscal year ended September 28, 1996, filed with the Securities
and Exchange Commission.
Overview
The Company has developed a laser-based system called SoftLight(SM)
for the removal of unwanted hair. The SoftLight system uses a low-energy,
dermatology laser in combination with a lotion that absorbs the laser's
energy to disable hair follicles. In April 1995, the Company received
clearance from the U.S. Food and Drug Administration (FDA) to
commercially market services using the SoftLight system. The Company
began earning revenue from the SoftLight system in the first quarter of
fiscal 1996 as a result of opening its first commercial location (Spa
Thira) in La Jolla, California, in November 1995. As of June 28, 1997,
the Company had 12 spas open in the U.S., two of which opened during the
third quarter of fiscal 1997. In addition, the Company's French joint
venture opened its first European Spa Thira in Paris in May. The Company
has signed leases for three additional sites in the U.S.
In June 1996, the Company commenced a program to license to
physicians and others the right to perform the Company's patented
SoftLight hair-removal procedure. In this program, the Company licenses
its technology and receives a one-time fee and a per-procedure royalty
that varies depending on the location treated. The Company also provides
the licensees with the lasers and lotion that are necessary to perform
the service.
The Company is marketing the SoftLight system internationally through
joint ventures and other licensing arrangements. In January 1996, the
Company established a joint venture in Japan. In fiscal 1997, the Company
entered into several international arrangements, establishing a joint
venture in France in November 1996 and five additional licensing
arrangements: in Saudi Arabia in November 1996; in Tunisia and Belgium in
December 1996; in the United Arab Emirates and Oman in March 1997; in
Switzerland in April 1997; and in Brazil in June 1997.
The Company continues to pursue an extensive research and development
program to improve the efficacy and duration of its hair-removal
treatment. The Company is currently testing a modification to its
procedure, called SoftLight 2.0, that has had positive laboratory
8PAGE
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THERMOLASE CORPORATION
Overview (continued)
results. Although the laboratory results are encouraging, the results are
preliminary and there can be no assurance that SoftLight 2.0 will be
successful in improving the hair-removal process. If the initial
laboratory results relating to SoftLight 2.0 are confirmed, the Company
anticipates implementing the procedure in early fiscal 1998. The Company
believes that improvements in the hair-removal procedure, including the
successful implementation of SoftLight 2.0, are critical elements in its
ability to improve the profitability of its business.
In March 1997, the Company filed with the FDA a 510(k) application
seeking clearance to market its laser skin-resurfacing technology. This
technology, which uses the same laser as the Company's hair-removal
system, is designed to improve the skin's texture and elasticity. In
addition, the 510(k) application seeks wrinkle-treatment claims for the
procedure.
The Company also manufactures and markets skin-care, bath, and body
products through its CBI Laboratories, Inc. (CBI) subsidiary, which also
manufactures the lotion used in the SoftLight hair-removal process.
Results of Operations
Third Quarter Fiscal 1997 Compared With Third Quarter Fiscal 1996
Revenues increased 104% to $12,900,000 in the third quarter of fiscal
1997 from $6,314,000 in the third quarter of fiscal 1996. The Company
earned revenues from hair-removal services of $7,012,000 in fiscal 1997,
compared with $1,493,000 in fiscal 1996. The increase in revenues
resulted primarily from an increase in the number of spas to 12, two of
which opened in the third quarter of fiscal 1997, compared with two spas
open during the third quarter of fiscal 1996. In March 1997, the Company
changed its pricing plan to exclusively offer single or multiple
treatment plans. The Company defers revenue related to payments for
multiple treatment plans, which is recognized over the anticipated
treatment period. As the Company collects further data concerning the
number of treatments required and duration of the treatment period, the
period of revenue recognition may be affected. Revenues also increased as
a result of fees from the Company's physicians' licensing program, which
was started in the third quarter of fiscal 1996 and produced only nominal
revenues during that quarter. In addition, revenues from hair-removal
services in the third quarter of fiscal 1997 included $1,052,000 of
minimum guaranteed payments relating to the Company's international
licensing arrangements, including $715,000 in payments received upon
granting technology rights under certain of such agreements, compared
with $667,000 in the third quarter of fiscal 1996. The amount of minimum
guaranteed payments recorded by the Company will vary depending on the
Company's ability to enter into additional international licensing
arrangements and the terms of any such arrangements. Revenues at CBI
increased to $5,888,000 in fiscal 1997 from $4,821,000 in fiscal 1996. A
portion of CBI's revenues are derived from sales to large retailers,
which have a relatively long buying cycle that results in quarterly
9PAGE
<PAGE>
THERMOLASE CORPORATION
Third Quarter Fiscal 1997 Compared With Third Quarter Fiscal 1996
(continued)
variations in revenues. The Company estimates that CBI will continue to
represent a decreasing portion of total revenues as revenues from
hair-removal services increase.
The gross profit margin in the third quarter of fiscal 1997 was 23%,
compared with 29% in the third quarter of fiscal 1996. The Company's
hair-removal business reported gross profit of $1,120,000 in fiscal 1997,
compared with gross profit of $304,000 in fiscal 1996. Each period was
impacted by the early operations of the Spa Thira business, which has
been operating below maximum capacity as the Company develops a client
base and continues refining its operating procedures, and due to
pre-opening costs incurred in connection with new spa openings, offset in
part by the effect of physicians' licensing fees and minimum guaranteed
payments relating to international licensing arrangements, which have a
relatively high gross profit margin. As the Company continues to open
additional Spa Thira locations in fiscal 1997, the effect of operating
each spa below maximum capacity as the Company develops its client base,
as well as pre-opening costs, will have a negative impact on the
Company's gross profit margin. The Company believes that improvements in
the efficacy and duration of the SoftLight process, including the
successful implementation of SoftLight 2.0, are critical elements in its
ability to improve the profitability of its spas. The gross profit margin
from the sale of skin-care and other personal-care products at CBI was
31% in both periods.
Selling, general, and administrative expenses as a percentage of
revenues increased to 51% in the third quarter of fiscal 1997 from 34% in
the third quarter of fiscal 1996. The increase was primarily due to costs
related to expanding the Company's personal-care service organization for
its Spa Thira salons and licensing programs, including the hiring of
senior management and administrative staff; national advertising costs
for the physicians' licensing program; and legal costs associated with
obtaining and protecting the Company's patent rights.
Research and development expenses increased to $1,856,000 in the
third quarter of fiscal 1997 from $823,000 in the third quarter of fiscal
1996. The Company expects its research and development expenses to
continue to exceed fiscal 1996 levels, due to increased pre-clinical and
clinical research related to improving the effectiveness of the Company's
hair-removal process and developing its skin-resurfacing process, and the
investigation of other health and beauty applications for its proprietary
laser technology.
Interest income decreased to $223,000 in the third quarter of fiscal
1997 from $881,000 in the third quarter of fiscal 1996, primarily as a
result of lower average invested balances, which resulted primarily from
property and equipment expenditures for the Company's Spa Thira salons
and licensing programs and from the Company's operating loss.
Equity in losses of joint ventures in the accompanying statement of
operations represents the Company's proportionate share of losses from
its international joint ventures.
10PAGE
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THERMOLASE CORPORATION
Third Quarter Fiscal 1997 Compared With Third Quarter Fiscal 1996
(continued)
The effective tax rate approximates the statutory federal income tax
rate in the third quarter of fiscal 1997 due to nondeductible
amortization of cost in excess of net assets of acquired company offset
by a state income tax benefit arising from operating losses in certain
states. The effective tax rate in the third quarter of fiscal 1996
exceeds the statutory federal income tax rate due to nondeductible
amortization of cost in excess of net assets of acquired company and the
impact of a provision for state income taxes.
First Nine Months Fiscal 1997 Compared With First Nine Months Fiscal 1996
Revenues increased 60% to $33,176,000 in the first nine months of
fiscal 1997 from $20,734,000 in the first nine months of fiscal 1996. The
Company earned revenues from hair-removal services of $14,731,000 in
fiscal 1997, compared with $2,631,000 in fiscal 1996. The increase in
revenues resulted primarily from an increase in the number of spas to 12,
eight of which opened in fiscal 1997, compared with two spas open during
the first nine months of fiscal 1996. Revenues also increased as a result
of fees from the Company's physicians' licensing program, which was
started in the third quarter of fiscal 1996 and produced only nominal
revenues during the first nine months of fiscal 1996. In addition,
revenues from hair-removal services in fiscal 1997 included $2,698,000 of
minimum guaranteed payments relating to the Company's international
licensing arrangements, including $1,715,000 in payments received upon
granting technology rights under certain of such agreements, compared
with $1,333,000 in fiscal 1996. Revenues at CBI increased slightly to
$18,445,000 in fiscal 1997 from $18,103,000 in fiscal 1996.
The gross profit margin in the first nine months of fiscal 1997 was
20%, compared with 32% in the first nine months of fiscal 1996. The
Company's hair-removal business reported gross profit of $775,000 in
fiscal 1997, compared with gross profit of $272,000 in fiscal 1996. The
gross profit margin was affected in both periods by the factors discussed
in the results of operations for the third quarter. The gross profit
margin from the sale of skin-care and other personal-care products at CBI
declined to 32% in fiscal 1997 from 35% in fiscal 1996, as a result of a
continued shift to lower-margin products at CBI.
Selling, general, and administrative expenses as a percentage of
revenues increased to 51% in the first nine months of fiscal 1997 from
35% in the first nine months of fiscal 1996, due to the reasons described
in the results of operations for the third quarter.
Research and development expenses increased to $4,158,000 in the
first nine months of fiscal 1997 from $2,409,000 in the first nine months
of fiscal 1996, due to the reasons described in the results of operations
for the third quarter.
11PAGE
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THERMOLASE CORPORATION
First Nine Months Fiscal 1997 Compared With First Nine Months Fiscal 1996
(continued)
Interest income decreased to $1,277,000 in the first nine months of
fiscal 1997 from $2,726,000 in the first nine months of fiscal 1996, due
to the reason described in the results of operations for the third
quarter.
Equity in losses of joint ventures in the accompanying statement of
operations represents the Company's proportionate share of losses from
its international joint ventures.
The effective tax rate approximates the statutory federal income tax
rate in the first nine months of fiscal 1997 due to the reasons described
in the results of operations for the third quarter of fiscal 1997. The
effective tax rate exceeds the statutory federal income tax rate in the
first nine months of fiscal 1996 due to the reasons described in the
results of operations for the third quarter of fiscal 1996.
Liquidity and Capital Resources
Consolidated working capital was $1,733,000 at June 28, 1997,
compared with $47,197,000 at September 28, 1996. Included in working
capital are cash, cash equivalents, and available-for-sale investments of
$8,073,000 at June 28, 1997, compared with $52,055,000 at September 28,
1996. Operating activities used $9,945,000 of cash during the first nine
months of fiscal 1997, primarily due to the Company's loss before income
taxes, depreciation, and amortization. Thermo Electron Corporation, the
majority owner of ThermoTrex Corporation (ThermoTrex), which in turn is
the majority owner of the Company, has agreed to loan the Company up to
$25,000,000, due October 5, 1998, to the extent the Company's working
capital needs and liquidity require, at an interest rate equal to the
90-day Commercial Paper Composite Rate plus 25 basis points, set at the
beginning of each quarter.
During the first nine months of fiscal 1997, the Company expended
$21,965,000 for purchases of property and equipment, including the
purchase of laser systems at an aggregate cost of $10,427,000 from Trex
Medical Corporation, a majority-owned subsidiary of ThermoTrex. The
Company has committed to purchase additional laser systems at an
aggregate cost of $825,000.
In September 1996, the Company's Board of Directors authorized the
repurchase by the Company of up to $10,000,000 of Company common stock
through August 28, 1997, in market transactions or pursuant to the
exercise by investors of standardized put options written on the
Company's common stock. In April 1997, the Company's Board of Directors
authorized the repurchase by the Company, through April 25, 1998, of up
to an additional $10,000,000 of its common stock. During the first nine
months of fiscal 1997, the Company repurchased 924,300 shares of its
common stock for $11,268,000 in market transactions and pursuant to the
exercise of standardized put options.
12PAGE
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THERMOLASE CORPORATION
Liquidity and Capital Resources (continued)
On April 2, 1997, the Company completed an exchange offer whereby its
shareholders had the opportunity to exchange one share of existing
Company common stock and $3.00 for a new unit consisting of one share of
Company common stock and one redemption right. The redemption right
entitles the holder to sell the related share of common stock to the
Company for $20.25 during the period from April 3, 2001, through April
30, 2001. The redemption right will expire and become worthless if the
closing price of Company common stock is at least $26.00 for 20 of any 30
consecutive trading days. In connection with this offer, the Company
issued in April 1997, 2,000,000 units in exchange for 2,261,706 shares of
Company common stock and $522,000 in cash, net of expenses (Note 3).
In connection with certain of the Company's joint venture
arrangements, the Company provided $1,144,000 in cash funding during the
first nine months of fiscal 1997, and has agreed to provide up to an
additional $5,500,000.
The Company has signed leases to open three additional Spa Thiras,
which it expects to open in the fourth quarter of fiscal 1997 or early in
fiscal 1998. Depending on its size, each spa will require approximately
$1,500,000 to $2,500,000 for such items as leasehold improvements and
laser systems. After completing these three spas, the Company expects to
concentrate its resources on increasing the capacity utilization of the
fifteen U.S. spas that will then be open and expanding its physicians'
licensing program and international licensing arrangements. Construction
will begin on new spas at such time as the existing spas produce improved
results from operations. In addition, the Company expects to expend
$1,000,000 to $1,500,000 during the remainder of fiscal 1997 for
equipment related to its licensing programs. The Company's future capital
expenditures will primarily be affected by the number of Spa Thira
locations that are developed and the number of physicians and other
domestic and international licensees engaged in its licensing programs.
The Company expects that it will finance its capital requirements through
a combination of internal funds, additional debt or equity financing,
and/or short-term borrowings from ThermoTrex or Thermo Electron
Corporation, ThermoTrex's parent, although, other than as described
above, it has no agreement with these companies to ensure that funds will
be available on acceptable terms or at all.
PART II - OTHER INFORMATION
Item 6 - Exhibits
See Exhibit Index on the page immediately preceding exhibits.
13PAGE
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THERMOLASE 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 31st day of July
1997.
THERMOLASE CORPORATION
Paul F. Kelleher
---------------------
Paul F. Kelleher
Chief Accounting Officer
John N. Hatsopoulos
---------------------
John N. Hatsopoulos
Vice President and Chief
Financial Officer
14PAGE
<PAGE>
THERMOLASE CORPORATION
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
-----------------------------------------------------------------------
10.1 Loan Agreement between the Company and Thermo Electron
Corporation dated July 30, 1997.
27 Financial Data Schedule.
Exhibit 10.1
------------
Thermo Electron Corporation
81 Wyman Street
Post Office Box 9046 (617) 622-1000
Waltham, MA 02254-9046 Fax: (617) 622-1207
July 31, 1997
ThermoLase Corporation
10455 Pacific Center Court
San Diego, CA 92121
Attn: John Hansen
President
Ladies and Gentlemen:
Thermo Electron Corporation hereby agrees to loan to ThermoLase
Corporation up to $25,000,000 as the working capital needs and liquidity
of ThermoLase require. Any drawdown of such amount shall be evidenced by
a promissory note due October 5, 1998 and shall bear interest payable
quarterly at a rate equal to the 90-day Commercial Paper Composite Rate
plus 25 basis points, set at the beginning of each quarter.
Please evidence your acceptance of the foregoing by signing in the
space provided below.
THERMO ELECTRON CORPORATION
By: /s/ John H. Hatsopoulos
-----------------------
Name: John H. Hatsopoulos
Title: President
ACCEPTED AND AGREED TO
THERMOLASE CORPORATION
By: /s/ John C. Hansen
--------------------
Name: John C. Hansen
Title: President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMOLASE
CORPORATION'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 28, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-END> JUN-28-1997
<CASH> 6,084
<SECURITIES> 1,989
<RECEIVABLES> 5,034
<ALLOWANCES> 452
<INVENTORY> 3,691
<CURRENT-ASSETS> 17,576
<PP&E> 43,307
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0
0
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</TABLE>
