Item 1. Business
(a) General Development of Business.
The businesses of Metrika Systems Corporation (the Company or the Registrant) operate in two segments: On-line Raw Materials Analysis and On-line Finished Materials Quality Control. The Company's Raw Materials segment consists of Gamma-Metrics, which designs, develops, manufactures, and sells on-line process-optimization systems that provide real-time, nondestructive analysis of the composition of raw materials in basic-materials production processes, including coals, cement, and minerals. In October 1998, this segment acquired MF Physics Corporation for $2 million. MF Physics manufactures neutron generators, pneumatic sample-transfer systems, and a number of neutron-activation analysis products for raw materials.
The Company's Finished Materials segment consists of Radiometrie, which manufactures advanced systems used to measure and control parameters such as materials thickness, coating thickness, and coating weight in web-type materials such as metal strip, rubber, and plastic foils. Customers use these systems to improve product quality and consistency, lower material costs, reduce energy consumption, and minimize waste. In July 1998, this segment acquired the stock of Honeywell-Measurex Data Measurement Corporation from Honeywell-Measurex Corporation for $29.0 million in cash. This business was renamed Radiometrie Corporation (Radiometrie U.S.). Radiometrie U.S. manufactures and sells computerized noncontact thickness, coating, and other measurement systems for the flat metal processing industry.
The Company's systems make real-time, on-line, precise measurements of materials using advanced scientific measurement techniques, including gamma spectroscopy, beta particle detection, laser spectroscopy, X-ray fluorescence, and ultrasound that allow noninvasive and nondestructive analysis. The Company's systems incorporate proprietary intelligent sensors that have been developed for specific production processes along with ultra high-speed signal-processing electronics. These systems can be combined with the Company's proprietary real-time software to form integrated process optimization systems designed to fit the customer's specific application.
The Company was incorporated as a Delaware corporation in November 1996. In connection with the Company's incorporation, Thermo Instrument Systems Inc. transferred to the Company the assets, liabilities, and business of its Gamma-Metrics subsidiary and Radiometrie division in exchange for 5,000,000 shares of the Company's common stock. As of January 2, 1999, Thermo Instrument owned 5,219,600 shares of the Company's common stock, representing 67% of such stock outstanding. During 1998*, Thermo Instrument purchased 219,600 shares in the open market for a total purchase price of $2.3 million. Thermo Instrument develops, manufactures, markets, and services instruments and software used for identification and quantification of complex molecular compounds and elements in gases, liquids, and solids. Uses include pharmaceutical research and clinical diagnostics, monitoring and measuring environmental pollutants, industrial inspection, and test and control for quality assurance and productivity improvement. In addition, Thermo Instrument develops, manufactures, markets, and services equipment for the measurement, preparation, storage, and automation of sample materials and photonics and vacuum components for original equipment manufacturers. Thermo Instrument is an 85%-owned subsidiary of Thermo Electron Corporation. As of January 2, 1999, Thermo Electron owned 627,100 shares of common stock of the Company, representing 8% of such stock outstanding. During 1998, Thermo Electron purchased these shares in the open market for $8.9 million. Thermo Electron is a world leader in monitoring, analytical, and biomedical instrumentation; biomedical products including heart-assist devices, respiratory-care equipment, and mammography systems; and paper recycling and papermaking equipment. Thermo Electron also develops alternative-energy systems and clean fuels, provides a range of services including industrial outsourcing and environmental-liability management, and conducts research and development in advanced imaging, laser, and electronic information-management technologies. - -------------------- * References to 1998, 1997, and 1996 herein are for the fiscal years ended January 2, 1999, January 3, 1998, and December 28, 1996, respectively.
Forward-looking Statements
Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, are made throughout this Annual Report on Form 10-K. 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 the Registrant's 1998 Annual Report to Shareholders, which statements are incorporated herein by reference.
(b) Financial Information About Industry Segments
Financial information concerning the Company's industry segments is summarized in Note 11 to Consolidated Financial Statements in the Registrant's 1998 Annual Report to Shareholders, which information is incorporated herein by reference.
(c) Description of Business
(i) Principal Products and Services
On-line Raw Materials Analysis
The Company manufactures on-line process optimization systems that noninvasively measure and analyze the physical and chemical properties of a stream of bulk solid materials in real time. The systems are primarily used to analyze the composition of raw materials for certain basic industries, such as coal, cement, and minerals. The analysis technique used in the Company's process optimization systems involves neutron interrogation. Under neutron interrogation, each element, when activated by neutrons, emits gamma rays of unique characteristics that allow identification and quantification of the elements present. Neutron interrogation allows the entire stream of the material to be analyzed and eliminates the need for sampling. In addition, it provides accurate analysis of the materials, especially those that are nonhomogeneous, and can be used to analyze a broad range of substances. The systems contain proprietary sensors that detect gamma rays emitted from the material being analyzed, which is activated by the neutron source within the analyzer. This yields a composite gamma ray spectrum of the material. Through on-line high-speed spectroscopy, this spectrum is then decomposed into its constituent parts by using microprocessors and sophisticated real-time analytical software. The analyzer can then translate this data into the elemental composition of the raw materials and can also use the information to infer certain quality-control parameters specific to the process.
The Company currently markets the following family of products based on its neutron-interrogation technology:
On-line Coal Analyzer. The Company's on-line coal analyzer can examine entire streams of coal at a rate of up to four hundred tons per hour, determine the sulfur and ash concentration of the coal on a continuous basis, and can also simultaneously compute the calorific value of the coal, among other quality parameters. Customers can use the data to blend or sort the coal depending on its quality. The Company has developed proprietary high-speed software that can be incorporated into the system to enable the customer to automatically adjust and control the coal blending and sorting process on-line.
Coal analyzers are currently used by coal mines and coal-burning utilities. Coal mines can use the coal analyzer to improve profitability by blending coals of different quality to meet specific contract requirements or environmental regulatory standards, by sorting out low-sulfur coal which can be sold for a premium or by controlling the specific gravity of separation in a coal-cleaning plant to ensure that quality specifications are met without over-cleaning. In addition to ensuring more consistent quality, on-line coal analysis improves recovery or yield from the mine, thus
extending the life of a mine by reducing the risk of premature exhaustion of low-sulfur reserves that are required to balance high-sulfur reserves. Coal-burning utilities use the coal analyzers to reduce costs while satisfying environmental emissions regulations.
CrossBelt Analyzer. The Company's CrossBelt Analyzer (CBA) is used primarily by the cement industry to analyze the composition of raw materials used in cement production. The CBA is essentially a horizontal tunnel that is assembled around a customer's conveyor belt. The CBA analyzes materials traveling on a conveyor belt at speeds of up to 600 feet per minute and with material flow rates in excess of 1,000 tons per hour. The system generates data on the elemental composition of the entire stream of materials, and can use the information to infer certain quality-control parameters such as lime-saturation factor and silica ratio. The CBA can incorporate high-speed proprietary software, which allows the customer to automatically control production processes. The CBA is incorporated on-line into their production process, which enables them to control the mix of raw materials at the beginning of the production line or to automatically control the blending of additives with crushed limestone and clay further down the line. Both approaches enable the producer to achieve more uniform cement quality. The CBA controls the production process by using the analytical data it compiles to automatically adjust the composition of the additive mix to achieve target quality levels. This approach helps reduce variations in the materials fed into the cement kiln yielding several benefits: lower energy consumption, greater throughput, and extended refractory life.
Mineral Slurry Analyzers. The Company's on-line analyzers use neutron interrogation to analyze mineral slurry, a mixture of fine insoluble materials and water, for the mineral extraction industry. The recovery of almost all minerals and metals involves multi-step beneficiation processes. In most cases the beneficiation begins by milling the ore and adding water to form a slurry. Additional steps to concentrate the element of interest often include size and mass classification, and froth flotation involving reagents. The Company's neutron-based mineral slurry analyzer, which analyzes the entire elemental composition of the slurry, can greatly improve the efficiency of the beneficiation process by using the collected data to automatically adjust various process parameters, including the amount of reagents used. The Company believes its neutron-based mineral slurry analyzer is suitable for controlling the beneficiation process for a wide variety of minerals.
The Company also manufactures on-line X-ray slurry analyzers and on-line particle-size analyzers. The X-ray slurry analyzers are used in the mineral processing industry, primarily for copper, zinc, lead, molybdenum, and uranium, to measure the concentration of certain elements. The equipment can also be designed to automatically control and adjust the amount of reagents used in the mineral beneficiation process. The X-ray slurry analyzer provides customers who do not require a comprehensive analysis system a cost-effective alternative to the Company's neutron-based mineral slurry analyzer. The on-line particle-size analyzers are real-time measuring instruments. The on-line particle-size analyzers use ultrasound together with proprietary models to determine the particle-size distribution and percent solids in mineral slurries.
Software Products. The Company complements its application-specific sensor technology with process optimization software. These systems use adaptive and predictive controls to maximize use of materials, as well as to blend raw materials to meet certain requirements in a cost-effective manner. The process of extracting, beneficiating, and utilizing raw materials is difficult to control due to variances in chemistry, size, and shape and time delays in the transport of materials from different points within the handling system. The Company's proprietary process control software can accomplish these optimization tasks by performing a model-based estimation and by adaptively controlling source materials.
FastLab. The Company offers its FastLab analyzer for rapid analysis of samples off-line, with minimal sample preparation. The FastLab can be used for numerous applications such as spot-check analysis of raw materials, core hole analysis, fuel analysis, and chemical additives analysis. This product is suitable for the same markets that use on-line elemental analysis.
Process Safety Instrumentation. The Company is a supplier of process safety instrumentation in the nuclear power industry. The Company's instrumentation is designed to improve the safety and efficiency of nuclear power plants. In addition, the Company offers automated test equipment and safety-related computer software for nuclear power plants and other facilities where radioactive materials are used.
Neutron Generators. The Company is a supplier of neutron generators for the mining industry, national laboratories, and high-tech manufacturers. The Company's product is used as part of a system to detect or measure elements of interest in a variety of applications including mineral exploration, oil well logging, explosives detection, and nuclear waste management.
On-line Finished Materials Quality Control
The Company develops, manufactures, and markets gauges and process optimization systems for industrial manufacturing lines for continuous production of certain web-type materials. Web-type materials are flat sheet materials like paper, metal strip, plastic foil, rubber, and glass. Typical high-volume products made from web-type materials include all types of vehicle bodies and other parts, metals used for refrigerators and similar products, beverage and food cans, cladding for buildings, and rubber tires. The Company's instruments measure the total thickness, basis weight, and coating thickness of web-type materials such as plastic foils, hot and cold metal strip, rubber, glass, and non-woven fabrics, and are also capable of detecting pinholes in these webs. The measuring technology incorporated in the Company's products is based on partial absorption, reflection, or change in ionizing or infrared radiation, as well as white light, ultraviolet light, and laser beams, by the materials to be measured. The Company's systems can measure a single point on the material to be measured, several points, or generate a "profile" of the web. Measured values are acquired without contact and without interfering with the production process, have high measurement accuracy, and are extremely reliable despite hostile environments. The Company offers its measuring gauges with or without its process optimization systems, which can be used to automatically regulate the customer's production process.
The Company's products incorporate a variety of measurement gauges such as X-ray thickness gauges, isotope thickness gauges, X-ray fluorescence coating gauges, or beta-backscatter gauges, depending on the application. The thickness gauges manufactured by the Company basically function by measuring partial absorption of energy by the material to be measured. The change in the intensity of the energy emitted is detected by application-specific sensors, then processed by high-speed microprocessors, before emerging as the measured value. These instruments can incorporate the Company's high-speed proprietary software to form a fully integrated process optimization system for continuous manufacturing processes and improved product quality.
The Company's products reduce the use of raw materials and energy, maximizing productivity, and product quality. The total thickness of web-type material, or the coating on it, is measured accurately at the point of manufacture by the Company's products and compared with an input target value. Adjustments can be made early in the process because the Company's products can accurately measure materials closer to the origin of the strip, thus reducing material waste.
(ii) and (xi) New Products; Research and Development
The Company maintains active programs for the development and introduction of new products and it has various ongoing programs for improvements to existing products. The Company also seeks to develop new applications for its existing products and technology. In particular, the Company is actively seeking new applications for its non-invasive, nondestructive analysis technologies.
Research and development expenses for the Company were $4.8 million, $3.8 million, and $3.0 million in 1998, 1997, and 1996, respectively.
(iii) Raw Materials
Various components of the Company's products are supplied by sole-source vendors. The Company has not experienced significant difficulty in obtaining adequate supplies from these vendors, and has identified alternate suppliers. However, there can be no assurance that the unanticipated loss of a single vendor would not result in delays in shipments or the introduction of new products.
(iv) Patents, Licenses, and Trademarks
The Company's policy is to protect its intellectual property rights, including applying for and obtaining patents, when appropriate. The Company is the owner of a number of patents expiring at various dates. Patent protection is believed to provide the Company with competitive advantages with respect to certain instruments. The Company also considers technical know-how, trade secrets, and trademarks to be important to its business.
(v) Seasonal Influences
The Company's Finished Materials segment experiences a slowdown in revenues during the first quarter of each calendar year primarily because its customers tend to place their orders earlier in the year so that they can have the systems installed either during the slow period of the summer or between Christmas and the New Year.
(vi) Working Capital Requirements
There are no special inventory requirements or credit terms extended to customers that would have a material adverse effect on the Company's working capital.
(vii) Dependency on a Single Customer
No single customer accounted for more than 10% of the Company's total revenues in any of the past three years.
(viii) Backlog
The Company's backlog of firm orders was:
(In thousands) 1998 1997 - --------------------------------------------- -------- ---------
Raw Materials $ 7,145 $ 17,515 Finished Materials 23,645 9,414 ------- --------
$30,790 $ 26,929 ======= ======== The Company includes in backlog only those orders for which it has received firm purchase orders and for which delivery has been specified within twelve months. Certain of these orders are subject to cancellation by the customer upon payment of a cancellation charge. Because of the possibility of customer changes in delivery schedules, cancellation of orders, and potential delays in product shipments, the Company's backlog as of any particular date may not be representative of actual sales for any succeeding period. The decrease in backlog in the Raw Materials segment was primarily due to a reduction in spending by raw-material producers and increased competition.
(ix) Government Contracts
Not applicable.
(x) Competition
In the Raw Materials segment, the Company competes primarily on performance and to a lesser extent on price. Competition regarding on-line coal and cement material analyzers is limited at present. Scantech Limited (Australia) is the Company's principal competitor in the on-line coal and cement material analysis markets. More recently, Polysius and Lucchin entered the cement market. The Company is a recent entrant into the on-line mineral slurry analysis market where it competes primarily with Outokumpu (Finland). The market for solids and multiphase analyzers for process control generally is fragmented, with numerous competitors. The Company believes it is a market leader in the segment of the solids and multiphase analyzer market for on-line bulk-materials analyzers using neutron interrogation.
Competition in the Finished Materials segment is highly fragmented with numerous competitors competing in various end-use market segments. As a result, competition varies according to the end-use segment. The Company competes based upon quality, performance, and price. The Company's largest competitors are Honeywell (U.S.), Toshiba (Japan), and Yokogawa (Japan). Honeywell, through its Ohmart division is a supplier to the plastics industry. Toshiba and Yokogawa are at present competing with the Company in Asia in the metals industry. IMS (Germany) and IRM (Belgium/U.S.), compete with the Company worldwide in the metals industry. There are a number of competitors such as NDC (US), Eurotherm (U.K.), and Infrared Engineering (U.K.), which compete with the Company in the plastics and rubber industry.
Certain of the Company's competitors have greater resources, manufacturing and marketing capabilities, technical staff, and production facilities than those of the Company. As a result, they may be able to adapt more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the promotion and sale of their products than the Company. Further, competition with respect to all of the Company's products could increase if new companies enter the market or if existing competitors expand their product lines. There can be no assurance that competitors of the Company will not develop technological innovations that will render products of the Company obsolete.
(xii) Environmental Protection Regulations
The Company believes that compliance by the Company with federal, state, and local environmental protection regulations will not have a material adverse effect on its capital expenditures, earnings, or competitive position.
(xiii) Number of Employees
As of January 2, 1999, the Company had a total of 508 employees. The Company has had no work stoppages and considers its relations with employees to be good.
(d) Financial Information About Exports by Domestic Operations and About Foreign Operations
Financial information about exports by domestic operations and about foreign operations is summarized in Note 11 to Consolidated Financial Statements in the Registrant's 1998 Annual Report to Shareholders, and is incorporated herein by reference.
(e) Executive Officers of the Registrant
Name Age Present Title (Fiscal Year First Became Executive Officer) -----------------------------------------------------------------
Ernesto A. Corte 60 President and Chief Executive Officer (1997) Werner G. Kramer 52 Executive Vice President (1997) Theo Melas-Kyriazi 39 Chief Financial Officer (1998) Paul F. Kelleher 56 Chief Accounting Officer (1997)
Each executive officer serves until his successor is chosen or appointed by the Board of Directors and qualified or until earlier resignation, death, or removal. Mr. Kelleher has held comparable positions for at least five years with Thermo Instrument or Thermo Electron. Mr. Corte has been President of the Company since its inception in November 1996, and Chief Executive Officer since February 1998. Mr. Corte has been President of the Company's Gamma-Metrics subsidiary since 1993. Mr. Kramer has been Executive Vice President of the Company since its inception in November 1996 and President of the Company's Eberline Radiometrie Instruments GmbH subsidiary and Radiometrie's parent company, Thermo Instrument Systems GmbH, since 1993. Mr. Melas-Kyriazi was appointed Chief Financial Officer of the Company and Thermo Electron on January 1, 1999. Mr. Melas-Kyriazi joined Thermo Electron in 1986 as Assistant Treasurer, and became Treasurer in 1988. He was named President and Chief Executive Officer of ThermoSpectra Corporation, a public subsidiary of Thermo Instrument, in 1994. In 1998, he became Vice President of Corporate Strategy for Thermo Electron. Messrs. Corte and Kramer are full-time employees of the Company. Messrs. Melas-Kyriazi and Kelleher are full-time employees of Thermo Electron, but devote such time to the affairs of the Company as the Company's needs reasonably require.
Item 2.
Item 2. Properties
The Company leases approximately 44,900 square feet in San Diego, California, pursuant to a lease that expires in 2003 and leases 9,300 square feet in Colorado Springs, Colorado, pursuant to a lease that expires in 2003. The Company uses these facilities for manufacturing, sales, and administration for its Raw Materials segment.
The Company also leases approximately 98,900 square feet in Gaithersburg, Maryland, pursuant to leases expiring in 1999 through 2002, approximately 24,000 square feet in Gloucester, England, pursuant to a lease expiring in 2001, and owns a facility with approximately 110,000 square feet in Erlangen, Germany, of which approximately 55,100 square feet are utilized by the Company, with the balance being utilized by another Thermo Instrument subsidiary. These facilities are used by the Company for manufacturing, sales, and administration for its Finished Materials segment. The Company believes that its facilities are in good condition and are suitable and adequate for its present operations. With respect to leases expiring in the near future, in the event the Company does not renew such leases, the Company believes suitable alternate space is available for lease on acceptable terms.
In addition, the Company leases office space throughout the world for its sales and service operations. The Company believes that these facilities are adequate for its present operations.
Item 3.
Item 3. Legal Proceedings
Not applicable.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II Item 5.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Information concerning the market and market price for the Registrant's common stock, $.01 par value, and related matters, is included under the sections labeled "Common Stock Market Information" and "Dividend Policy" in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
Item 6.
Item 6. Selected Financial Data
The information required under this item is included under the sections labeled "Selected Financial Information" and "Dividend Policy" in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information required under this item is included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
Item 7A.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required under this item is included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Registrant's 1998 Annual Report to Shareholders and is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data
The Registrant's Consolidated Financial Statements as of January 2, 1999, and Supplementary Data are included in the Registrant's 1998 Annual Report to Shareholders and are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
PART III Item 10.
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors required under this item is incorporated herein by reference from the material contained under the caption "Election of Directors" in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the close of the fiscal year. The information concerning delinquent filers pursuant to Item 405 of Regulation S-K is incorporated herein by reference from the material contained under the heading "Section 16(a) Beneficial Ownership Reporting Compliance" under the caption "Stock Ownership" in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the close of the fiscal year.
Item 11.
Item 11. Executive Compensation
The information required under this item is incorporated herein by reference from the material contained under the caption "Executive Compensation" in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the close of the fiscal year.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required under this item is incorporated herein by reference from the material contained under the caption "Stock Ownership" in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the close of the fiscal year.
Item 13.
Item 13. Certain Relationships and Related Transactions
The information required under this item is incorporated herein by reference from the material contained under the caption "Relationship with Affiliates" in the Registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the close of the fiscal year.
PART IV Item 14.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a,d) Financial Statements and Schedules
(1)The consolidated financial statements set forth in the list below are filed as part of this Report.
(2)The consolidated financial statement schedule set forth in the list below is filed as part of this Report.
(3)Exhibits filed herewith or incorporated herein by reference are set forth in Item 14(c) below.
List of Financial Statements and Schedules Referenced in this Item 14
Information incorporated by reference from Exhibit 13 filed herewith:
Consolidated Statement of Income Consolidated Balance Sheet Consolidated Statement of Cash Flows Consolidated Statement of Comprehensive Income and Shareholders' Investment Notes to Consolidated Financial Statements Report of Independent Public Accountants
Financial Statement Schedules filed herewith:
Schedule II: Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or not required, or because the required information is shown either in the financial statements or in the notes thereto.
(b) Reports on Form 8-K
On December 10, 1998, the Company filed a Current Report on Form 8-K dated December 10, 1998, with respect to an update to Thermo Electron's proposed corporate reorganization announced on August 12, 1998.
(c) Exhibits
See Exhibit Index on the page immediately preceding exhibits.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 15, 1999 METRIKA SYSTEMS CORPORATION
By: /s/ Ernesto A. Corte Ernesto A. Corte President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, as of March 15, 1999.
Signature Title
By: /s/ Ernesto A. Corte President, Chief Executive Officer, and Director Ernesto A. Corte
By: /s/ Theo Melas-Kyriazi Chief Financial Officer Theo Melas-Kyriazi
By: /s/ Paul F. Kelleher Chief Accounting Officer Paul F. Kelleher
By: /s/ Joseph A. Baute Director Joseph A. Baute
By: /s/ Willard R. Becraft Director Willard R. Becraft
By: /s/ Denis A. Helm Chairman of the Board and Director Denis A. Helm
By: /s/ John T. Keiser Director John T. Keiser
By: /s/ Earl R. Lewis Director Earl R. Lewis
Report of Independent Public Accountants
To the Shareholders and Board of Directors of Metrika Systems Corporation:
We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in Metrika Systems Corporation's Annual Report to Shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 16, 1999. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in Item 14 on page 11 is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the consolidated financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.
Arthur Andersen LLP
Boston, Massachusetts February 16, 1999
EXHIBIT INDEX Exhibit Number Description of Exhibit
2 Stock Purchase Agreement dated as of May 6, 1998, by and between the Company and Honeywell-Measurex Corporation (filed as Exhibit 2 to the Registrant's Current Report on Form 8-K for events occurring on July 5, 1998, and incorporated herein by reference).
3.1* Certificate of Incorporation of the Company, as amended.
3.2* By-Laws of the Company.
4* Specimen Common Stock Certificate.
10.1* Corporate Services Agreement dated as of November 26, 1996, between Thermo Electron Corporation and the Company.
10.2 Thermo Electron Corporate Charter, as amended and restated effective January 3, 1993 (filed as Exhibit 10.1 to Thermo Electron's Annual Report on Form 10-K for the fiscal year ended January 3, 1993 [File No. 1-8002] and incorporated herein by reference).
10.3* Tax Allocation Agreement dated as of November 26, 1996, between Thermo Electron and the Company.
10.4* Master Repurchase Agreement dated as of November 26, 1996, between Thermo Electron and the Company.
10.5 Amended and Restated Master Guarantee Reimbursement and Loan Agreement dated as of December 3, 1997, between Thermo Electron and the Company (filed as Exhibit 10.7 to Thermo Instrument's Annual Report on Form 10-K for fiscal year ended January 3, 1998 [File No. 1-9786] and incorporated herein by reference).
10.6 Amended and Restated Master Guarantee Reimbursement and Loan Agreement dated as of December 3, 1997, between Thermo Instrument and the Company (filed as Exhibit 10.6 to the Registrant's Annual Report on Form 10-K for the year ended January 3, 1998, and incorporated herein by reference).
10.7* Deferred Compensation Plan for Directors of the Company.
10.8* Indemnification Agreement dated as of November 26, 1996, between Thermo Instrument and the Company.
10.9* Letter Agreement dated as of December 4, 1996, between Thermo Instrument and the Company.
10.10* Indemnification Agreement dated as of December 4, 1996, between Thermo Instrument and the Company.
10.11* Triple Net Lease Agreement dated January 1, 1995, between Gamma-Metrics, as lessee and Radnor/Collins/Sorrento Partnership, as lessor, for property located at 5788 Pacific Center Boulevard, San Diego, California.
10.12* Form of Indemnification Agreement for Officers and Directors.
Exhibit Number Description of Exhibit
10.13* Equity Incentive Plan of the Company (maximum number of shares issuable is 800,000 shares after adjustment to reflect share increase approved in 1998).
In addition to the stock-based compensation plans of the Registrant, the executive officers of the Registrant may be granted awards under stock-based compensation plans of Thermo Electron and Thermo Instrument for services rendered to the Registrant or such affiliated corporations. The terms of such plans are substantially the same as those of the Registrant's Equity Incentive Plan.
10.14* Lease Agreement dated as of October 1, 1993, between Thermo Instrument Systems GmbH (the Company's subsidiary), as lessor, and ESM Eberline Instruments Strahlen and Umweltmesstechnik GmbH, as lessee.
10.15 Restated Stock Holding Assistance Plan and Form of Promissory Note (filed as Exhibit 10.16 to the Registrant's Annual Report on Form 10-K for the year ended January 3, 1998, and incorporated herein by reference).
13 Annual Report to Shareholders for the year ended January 2, 1999 (only those portions incorporated herein by reference).
21 Subsidiaries of the Registrant.
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
Each exhibit above which is marked with an asterisk (*) is incorporated herein by reference to the correspondingly numbered exhibit to the Company's Registration Statement on Form S-1 [File No. 333-25243].