SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                   ------------------------------------------
                         AMENDMENT NO. 3 ON FORM 10-K/A
                                  TO FORM 10-K
    (mark one)
    [ X ]Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the fiscal year ended September 28, 1996

    [   ] 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: (619) 646-5700

           Securities registered pursuant to Section 12(b) of the Act:

             Title of each class        Name of Exchange on which registered
        ----------------------------    ------------------------------------
        Common Stock, $.01 par value           American Stock Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                                      None

    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, and (2) has been subject to
    the filing requirements for at least the past 90 days. Yes [ X ] No [  ]

    Indicate by check mark if disclosure of delinquent filers pursuant to
    Item 405 of Regulation S-K is not contained herein, and will not be
    contained, to the best of the Registrant's knowledge, in definitive proxy
    or information statements incorporated by reference into Part III of this
    Form 10-K or any amendment to this Form 10-K. [  ]

    The aggregate market value of the voting stock held by nonaffiliates of
    the Registrant as of January 30, 1997, was approximately $193,453,496.

    As of January 30, 1997, the Registrant had 40,700,310 shares of Common
    Stock outstanding.
PAGE
<PAGE>
    ThermoLase Corporation Amendment No. 3
    on Form 10-K/A to Annual Report on Form 10-K
    for the fiscal year ended September 28, 1996


                       DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the Registrant's Fiscal 1996 Annual Report to
    Shareholders for the year ended September 28, 1996, are incorporated by
    reference into Parts I and II.

        Item 1 of Part I of the Registrant's Annual Report on Form 10-K for
    the fiscal year ended September 28, 1996 is hereby amended and restated
    in its entirety as contained in the following Attachment A, which is
    included herein and made a part of this Annual Report on Form 10-K, as
    amended. The Registrant's Fiscal 1996 Annual Report to Shareholders for
    the year ended September 28, 1996 (only those portions incorporated by
    reference into the Annual Report on Form 10-K, as amended) is hereby
    amended and restated in its entirety as contained in Exhibit 13 filed
    herewith and incorporated herein by reference.


                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the
    Securities Exchange Act of 1934, the Registrant has duly caused this
    Amendment No. 3 on Form 10-K/A to be signed by the undersigned, duly
    authorized.

                                                 THERMOLASE CORPORATION



                                                 By: Paul F. Kelleher
                                                     ----------------
                                                     Paul F. Kelleher
                                                     Chief Accounting
                                                       Officer










                                        2PAGE
<PAGE>
                                                                 ATTACHMENT A
                                     PART I

    Item 1. Business

    (a) General Development of Business

        ThermoLase Corporation (the Company or the Registrant) has developed
    a proprietary system for the removal of unwanted hair (the SoftLight(SM)
    system). In April 1995, the Company received clearance from the U.S. Food
    and Drug Administration (FDA) to commercially market services using this
    system.

        The SoftLight system uses a low-energy, dermatology laser in
    combination with a lotion to remove hair. The Company believes that its
    system has significant advantages over electrolysis, which is a slow and
    painful process in which an electrified needle is inserted directly into
    each individual hair follicle.

        The Company is marketing the SoftLight system in the U.S. through its
    Spa Thira salons and through licensing agreements with doctors. The
    Company is marketing the SoftLight system in foreign countries by
    engaging in joint ventures and other licensing arrangements with
    companies or individuals that are experienced in those locations.

        In November 1995, the Company opened its first commercial salon, Spa
    Thira, in La Jolla, California. The Company opened additional salons in
    Dallas in June 1996, in Houston and Beverly Hills in September 1996, in
    Denver in October 1996, and in Boca Raton in November 1996. The Company
    also plans to open a spa in suburban Detroit in December 1996 and has
    signed leases for four additional sites in Greenwich, Connecticut;
    Manhasset, New York; suburban Minneapolis; and Palm Beach, Florida. Lease
    negotiations are under way for additional sites.

        In January 1996, the Company entered into a joint venture to market
    the SoftLight process in Japan, as well as its laser-based skin-
    rejuvenation process, if and when available. Before opening the first spa
    in Japan, the joint venture must obtain Japanese regulatory clearance to
    market the SoftLight process, for which it is presently conducting
    clinical studies to obtain data to submit to the appropriate Japanese
    regulatory authorities. The Company currently holds a 50% stake in the
    joint venture, with an option to increase its ownership to 51% pursuant
    to a fair-value purchase option.

        In June 1996, the Company initiated a program to license its
    SoftLight technology to doctors. In this program, the Company licenses
    its technology to doctors and receives a per-procedure royalty that
    varies depending on the location treated.  The Company also provides the
    doctors with the lasers and supplies that are necessary to perform the
    service. A total of 55 doctors were licensees as of December 1, 1996.

        In June 1996, the Company purchased $4,400,000 of convertible
    preferred stock of AntiCancer Incorporated (AntiCancer), representing an
    approximate 10% equity interest on a fully diluted basis. The Company
    also has the option to purchase an additional 5% equity interest at any
    time before the earlier of 2011 or AntiCancer's initial public offering
    of common stock. San Diego-based AntiCancer is developing technology that
    may have the potential to enhance the effectiveness of the SoftLight
                                       A-1PAGE
<PAGE>
    process. In this technology, liposomes, which have been proven to be
    effective delivery agents in other applications, might provide a more
    efficient method of delivering carbon, which is the primary ingredient in
    the lotion used in the SoftLight process, to hair follicles. The Company
    has signed an agreement to license this technology as it pertains not
    only to hair removal, but also to stimulation of hair growth, suppression
    of hair growth, and hair coloring. The agreement calls for up to
    $1,500,000 in future payments by the Company upon the attainment by
    AntiCancer of certain milestones relating to the satisfactory completion
    of certain preliminary efficacy testing and regulatory matters. In
    addition to such future payments, the Company will be substantially
    responsible for development costs incurred after attainment of such
    milestones. In the event that the funded development efforts result in
    commercially viable products that the Company elects to market, the
    Company will pay AntiCancer a royalty based on sales, subject to certain
    minimum payments.

        In November 1996, the Company entered into a joint venture to market
    its SoftLight process in France, as well as its laser-based
    skin-rejuvenation process, if and when available. The joint venture plans
    to open Spa Thira salons in France and to sublicense to French physicians
    and others the right to perform services using the SoftLight system. The
    Company has committed to provide up to $5,000,000 to fund working capital
    requirements of the joint venture in exchange for its 50% stake in the
    joint venture. The Company's partner in the venture, an affiliate of
    Groupe Jacques Dessange (a leading provider of premium hair- and
    skin-care services in France), has also committed to fund up to
    $5,000,000 in exchange for its 50% ownership. The Company has licensed
    the technology to perform the SoftLight process to the joint venture, and
    will receive a royalty based on the joint venture's revenues.

        In November 1996, the Company entered into a license agreement with a
    third party, which will market the SoftLight process through Spa Thira
    salons and sublicensing arrangements in Saudi Arabia, as well as its
    laser-based skin-rejuvenation process, if and when available. 

        The Company is investigating other applications for its laser-based
    technology, and in June 1995 was granted a patent covering a laser-based
    skin-rejuvenation system, which the Company believes may be used to
    remove the outer layers of dead skin cells. In recent years, those
    seeking younger-looking skin have embraced a variety of methods for
    removing wrinkles, including dermabrasion (mechanically sanding the skin)
    and chemical peels. More recently, carbon dioxide (CO2) lasers have been
    used to remove wrinkles, but their use has been associated with long
    healing times and, in some cases, undesirable side effects. The Company
    believes that the skin-rejuvenation process that it is developing will
    cause less skin damage than existing laser skin treatments that use a CO2
    laser. Although the safety of using lasers for skin treatments has been
    established by several systems that are already approved by the FDA for
    the removal of birthmarks and tattoos, the Company may not commercially
    sell its skin-rejuvenation system, or services using the system, until it
    has received clearance from the FDA. The Company is currently conducting
    clinical trials at two sites: the University of New Mexico and in 
                                       A-2PAGE
<PAGE>
    Westwood, New Jersey, under the direction of Dr. David Goldberg. The
    Company plans to submit a 510(k) application containing clinical data by
    the end of the second quarter of fiscal 1997.

        In December 1993, the Company acquired CBI Laboratories, Inc. (CBI),
    a manufacturer of skin-care and bath and body products. CBI provides the
    Company with expertise in the market for personal-care products and
    manufactures the lotion used with the SoftLight system. In addition, CBI
    has recently started manufacturing a line of Spa Thira products to be
    sold at the spas and at doctors' offices where SoftLight services are
    provided.

        As of September 28, 1996, ThermoTrex Corporation (ThermoTrex) owned
    25,960,996 shares of the common stock of the Company, representing 64% of
    such stock then outstanding. A publicly traded, majority-owned subsidiary
    of Thermo Electron Corporation (Thermo Electron), ThermoTrex, through its
    publicly traded, majority-owned Trex Medical Corporation (Trex Medical)
    subsidiary, is the world's leading manufacturer of mammography and
    stereotactic breast-biopsy systems, and also supplies other specialized
    and general-purpose X-ray equipment, in addition to the Company's
    products and services. ThermoTrex also conducts advanced technology
    research and is currently developing a laser communication system,
    products for the medical imaging and avionics markets, and is pursuing
    industrial applications for its advanced-materials technology. Thermo
    Electron is a world leader in environmental monitoring and analysis
    instruments, biomedical products such as heart-assist devices and
    mammography systems, papermaking and paper-recycling equipment, biomass
    electric power generation, and other specialized products and
    technologies. Thermo Electron also provides a range of services related
    to environmental quality.

        In fiscal 1996*, the Company purchased SoftLight laser systems from
    Trex Medical at an aggregate cost of $8,549,000. As of September 28,
    1996, the Company has committed to purchase additional lasers at an
    aggregate cost of $6,402,000.

    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. These statements involve a number of risks and
    uncertainties, including those detailed under the caption
    "Forward-looking Statements -- Risk Factors" in the Registrant's Fiscal
    1996 Annual Report to Shareholders incorporated herein by reference.

    (b) Financial Information About Industry Segments
  
        The Company conducts business in one industry segment.

    * In September 1995, the Company changed its fiscal year end from the
      Saturday nearest December 31 to the Saturday nearest September 30.
      References to "fiscal 1996," "fiscal 1995," and "1994" herein are for
      the year ended September 28, 1996, the nine months ended September 30,
      1995, and the year ended December 31, 1994, respectively.
                                       A-3PAGE
<PAGE>
    (c) Description of Business

        (i) Principal Products and Services

    Laser-based Hair Removal

        The patented SoftLight system uses a low-energy, dermatology laser in
    combination with a lotion that absorbs the laser's energy to disable hair
    follicles. Unlike electrolysis, the SoftLight system can disable numerous
    hair follicles at one time. As a result, the Company believes that it
    will be able to address a larger market than electrolysis by offering
    hair removal from large areas, such as the legs. The lasers, which are
    similar to those used for tattoo and birthmark removal, are manufactured
    for the Company by Trex Medical. The lotion is manufactured by the
    Company's CBI Laboratories subsidiary.

        In a typical treatment, the area from which hair is to be removed is
    first waxed to open each hair duct. The lotion is then applied, and the
    area is scanned with the laser beam. The laser energy passes through the
    skin and is absorbed by the lotion that has penetrated the hair duct,
    causing the temperature of the lotion to increase to a level that
    disables the hair follicles. Each client typically has a series of
    treatments, for which the Company's spas currently offer several pricing
    programs, including fixed fees for one or more treatments and fixed fees
    for treatments during specified time periods. The per treatment cost of
    the SoftLight system to the customer is, in general, substantially higher
    than the per treatment costs of alternative methods of hair removal,
    including waxing, electrolysis, and shaving. The total cost of the
    SoftLight system in comparison to these alternatives varies depending on
    factors including customer preference, body part treated, and the
    efficacy of the Company's process in comparison to such alternatives.

        The Company has invested and continues to invest in research and
    development to improve the efficacy of the system and increase the length
    of time between treatments. In 1994, the Company conducted a clinical
    trial using a SoftLight laser to collect data on the effectiveness of the
    SoftLight hair-removal system under the clinical protocol established for
    the Company's FDA submission. Results were based on a dermatologist's
    visual observation of each subject's treatment area at various time
    intervals after treatment and varied depending upon the anatomical site
    treated. Of the 65 anatomical sites screened in 12 weeks after receiving
    such treatment, 49 (75%) experienced a reduction in hair growth greater
    than 30%, with the average reduction in hair growth equal to 46%. Of the
    32 anatomical sites screened 24 weeks after receiving such treatment, 21
    (66%) experienced a reduction in hair growth greater than 30%, with the
    average reduction in hair growth equal to 39%. 

        The Company is marketing the SoftLight system in the U.S. through its
    Spa Thira salons and through licensing agreements with doctors. The
    Company is marketing the SoftLight system in foreign countries by
    engaging in joint ventures or other licensing arrangements with companies
    or individuals that are experienced in those locations.
                                       A-4PAGE
<PAGE>
        In November 1995, the Company opened its first commercial salon, Spa
    Thira, in La Jolla, California. The Company opened additional salons in
    Dallas in June 1996, in Houston and Beverly Hills in September 1996, in
    Denver in October 1996, and in Boca Raton in November 1996. The Company
    also plans to open a salon in suburban Detroit in December 1996 and has
    signed leases for four additional sites in Greenwich, Connecticut;
    Manhasset, New York; suburban Minneapolis; and Palm Beach, Florida. Lease
    negotiations are under way for additional sites.

        In June 1996, the Company initiated a program to license its
    SoftLight technology to doctors. In this program, the Company licenses
    its technology to doctors and receives a per-procedure royalty that
    varies depending on the location treated.  The Company also provides the
    doctors with the lasers and supplies that are necessary to perform the
    service. A total of 55 doctors were licensees as of December 1, 1996.

        In January 1996, the Company entered into a joint venture to market
    the SoftLight process in Japan, as well as its laser-based skin-
    rejuvenation process, if and when available. The Company currently holds
    a 50% stake in the joint venture, with an option to increase its
    ownership to 51% pursuant to a fair-value purchase option. During fiscal
    1996, the Company received $2.0 million in minimum guaranteed payments in
    accordance with contractual terms. The Company will receive $1.0 million
    in minimum guaranteed payments in fiscal 1997, subject to certain
    exceptions in the event the joint venture is unable to obtain patent
    protection in Japan on prescribed terms. The Company's primary partner in
    the joint venture is the Fox River Investment Group, whose principals and
    partners have extensive experience developing consumer products and
    services in Japan. Before opening the first spa in Japan, the joint
    venture must obtain Japanese regulatory clearance to market the SoftLight
    process, for which it is presently conducting clinical studies to obtain
    data to submit to the appropriate Japanese regulatory authorities.

        In November 1996, the Company entered into a joint venture to market
    its SoftLight process in France, as well as its laser-based
    skin-rejuvenation process, if and when available. The joint venture plans
    to open Spa Thira salons in France and to sublicense to French physicians
    and others the right to perform services using the SoftLight system. The
    Company has committed to provide up to $5,000,000 to fund working capital
    requirements of the joint venture in exchange for its 50% stake in the
    joint venture. The Company's partner in the venture, an affiliate of
    Groupe Jacques Dessange (a leading provider of premium hair- and
    skin-care services in France), has also committed to fund up to
    $5,000,000 in exchange for its 50% ownership. The Company has licensed
    the technology to perform the SoftLight process to the joint venture, and
    will receive a royalty based on the joint venture's revenues.

        In November 1996, the Company entered into a license agreement with a
    third party, which will market the SoftLight process through Spa Thira
    salons and sublicensing arrangements in Saudi Arabia, as well as its
    laser-based skin-rejuvenation process, if and when available. Pursuant to
    the agreement, the Company will receive up-front fees totaling $1,000,000
    over a two-year period and a fee based on revenues derived from SoftLight
    services.
                                       A-5PAGE
<PAGE>
        The Company's existing and planned spas are designed to reflect the
    environment of a luxurious day spa. The Company believes that the
    uniformity of its centers will foster brand recognition and facilitate
    the opening of new spas. The Company currently utilizes medical staff,
    including physicians, nurses, and other medical personnel, to operate the
    SoftLight system at its centers.

        The Company advertises the SoftLight system through an advertising
    and public relations campaign focused on Company exposure in fashion and
    health magazines as well as the national news media. 

        During fiscal 1996, the Company derived revenues of $4,647,000 from
    laser-based hair removal services.

    Personal-care Products

        In December 1993, the Company acquired CBI, a designer, developer,
    manufacturer, and packager of high-quality personal-care products for
    sale to retailers under its own brand names and as a contract
    manufacturer under arrangements with third parties. CBI develops and
    manufactures most of its products, which include shampoos, lotions,
    shower creams, bath salts, and facial treatments, using botanicals and
    herbal extracts, with no animal fats, chemical dyes, or artificial
    aromas. CBI has the facilities and personnel to develop new product
    formulations, design packaging layouts, mix and fill formulations, and
    package final products for distribution. CBI does not manufacture
    packaging such as containers and boxes, but contracts with third parties
    for these supplies. CBI has a portfolio of approximately 3,000
    formulations, and may manufacture up to 300 different products in a
    quarter. Through fiscal 1995, CBI's sales accounted for all of the
    Company's revenues.

        CBI divides its business into three primary groups: Salon, Custom
    Design, and Store Brands. The Salon group, which represents CBI's
    original business, develops and manufactures a line of products primarily
    sold directly by CBI to professional estheticians in skin-care salons and
    spas. The Custom Design group markets CBI's manufacturing and design
    services primarily to major retailers and multilevel marketing groups for
    custom design of private-label product lines. The Store Brands group
    markets complete proprietary product lines created by CBI, including
    product formulations, packaging, brand name, and promotional materials,
    which can be purchased by a customer for sale in its retail outlets as an
    exclusive product line. 

        CBI's marketing and sales strategy varies by product line. Sales in
    the Salon group are made by phone solicitations and by sales
    representatives. Sales in the Custom Design and Store Brands groups are
    managed by the president of CBI and a group of account executives working
    exclusively in this area. In addition, the Company expects its network of
    Spa Thira salons and physicians' offices where SoftLight services are
    offered to provide a retail outlet for CBI's salon products. To support
    its marketing activities, CBI attends industry trade shows and advertises
    in major trade publications.
                                       A-6PAGE
<PAGE>
        During fiscal 1996, fiscal 1995, and 1994, the Company derived
    revenues of $23,165,000, $17,544,000, and $18,682,000 from the sale of
    personal-care products.

        (ii) New Products

        In June 1995, the Company was issued a U.S. patent covering a
    laser-based exfoliation system, which the Company believes may be used to
    remove the outer layers of dead skin cells. In this skin-rejuvenation
    system, a lotion, which is applied to the area to be treated, is absorbed
    by the outer layers of dead skin cells, which are more loosely connected
    than the new skin below. When the treatment area is scanned with the
    laser, the laser's energy is absorbed by the lotion causing the dead skin
    cells to break free. The Company is currently performing studies at two
    sites: the University of New Mexico and in Westwood, New Jersey, under
    the direction of Dr. David Goldberg, to determine the safety and efficacy
    of this system. The Company is required to perform clinical trials and to
    obtain FDA clearance before it can commercially market its skin-
    rejuvenation system. The Company plans to submit a 510(k) application
    containing clinical data by the end of the second quarter of fiscal 1997.
    If the skin-rejuvenation system is commercially viable and the Company
    receives FDA clearance to market it, the Company currently intends to
    offer its skin-rejuvenation system at its Spa Thira salons.

        (iii) Raw Materials

        Raw materials, components, and supplies purchased by the Company are
    either available from a number of different suppliers or from alternative
    sources that could be developed without a material adverse effect on the
    Company. To date, the Company has experienced no difficulties in
    obtaining these materials.

        (iv) Patents, Licenses, and Trademarks

        The Company's policy is to protect its intellectual property rights
    relating to its work on the SoftLight system including, if appropriate,
    applying for patents in the U.S. and foreign countries. The Company has
    been issued two U.S. patents and certain foreign patents related to its
    hair-removal system, and has various patents pending to extend the
    coverage of the U.S. patents in the U.S. and in foreign countries. The
    Company has corresponding patent applications pending in numerous foreign
    countries and in the European Community (EC) and has reserved its rights
    to file further corresponding patent applications in countries which are
    members of the Patent Cooperation Treaty (PCT). The Company's issued U.S.
    patents cover a hair-removal system that incorporates a substance that
    penetrates the hair duct and absorbs the energy from an illuminating
    light source that penetrates the skin.

        The Company has been issued one U.S. patent related to its
    skin-rejuvenation system. The Company has corresponding patent
    applications pending in numerous foreign countries and has reserved its
    rights to file further corresponding patent applications in countries
    which are members of the PCT.

                                       A-7PAGE
<PAGE>
        The Company has patent applications pending in the United States and
    has reserved its rights to file patent applications in countries that are
    members of the PCT, related to a laser-based drug-delivery system using a
    concept similar to its laser-based hair-removal system.

        The Company intends to aggressively pursue any person or company that
    offers services that the Company believes infringe on one or more of its
    patents.

        The technology underlying the SoftLight system, including all patents
    issued thereon, belongs to the Company by virtue of a license agreement
    executed in February 1993 between the Company and the inventor of the
    system, which grants the Company an irrevocable, exclusive, worldwide,
    perpetual license to the technology in exchange for a $100,000 commitment
    fee and a royalty equal to 0.25% of revenues generated from the sale or
    use of the SoftLight system through February 10, 2010.

        CBI relies primarily on trade secret protection for the proprietary
    formulations that form the basis of its products. CBI generally retains
    the proprietary rights to the formulations it develops, either for itself
    or for a specific customer.

        (v) Seasonal Influences

        Due to the recent growth of CBI's sales to stores, the Company
    experienced an increase in revenues in the first quarter of fiscal 1996
    and the fourth quarter of calendar 1994 as a result of holiday demand, a
    seasonal trend that the Company expects will continue.

        (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 fiscal 1996.

        (viii) Backlog

        The Company's backlog of firm orders at September 28, 1996 and
    September 30, 1995, which consisted exclusively of orders for CBI's
    products, was $5,466,000 and $4,600,000, respectively. The Company
    anticipates that substantially all of its backlog will be shipped or
    completed during fiscal 1997.

        (ix) Government Contracts

        Not applicable.
                                       A-8PAGE
<PAGE>
        (x) Competition

        The Company expects that, in the near term, the principal competitors
    relative to treatment using the SoftLight system will be electrolysis
    providers. The electrolysis market is characterized by many small
    practitioners. Although the Company believes that it has a significant
    competitive advantage over electrolysis, it does not have the
    well-established network of client relationships that many electrologists
    have. In addition, a number of laser manufacturers have announced that
    they have filed applications with the FDA seeking to obtain clearance to
    market a laser for hair removal. Although, to date, none of these
    companies has been successful in obtaining such clearance, a number of
    them are currently marketing substantially similar devices for
    indications other than hair removal. The Company believes that certain of
    these devices are being used "off-label" for hair removal by some
    physicians in the U.S. and are being marketed for hair removal in some
    foreign jurisdictions where regulatory clearance is not as stringent as
    it is in the United States. The Company's products and services will also
    compete with other hair-removal products. If the Company's technology is
    accepted by the general public, the Company expects that others will seek
    to develop similar technologies and products that may compete directly
    with the SoftLight system.

        The professional skin-care and bath-and-body products markets are
    highly competitive. In selling its Salon product line, CBI competes with
    a number of small manufacturers and divisions of larger companies. The
    competition in this market is fragmented with no one competitor
    dominating the market. In the Custom Design and Store Brands groups, CBI
    competes with numerous contract packaging companies that can prepare and
    package custom formulations for customers. Some of these competitors have
    substantially greater financial, marketing, and research and development
    resources than those of the Company. CBI competes in these markets by
    offering its customers exclusive product lines that the Company believes
    can generally be sold at a lower price but with higher margins than CBI's
    competitors.

        (xi) Research and Development

        During fiscal 1996, fiscal 1995, and 1994, the Company incurred
    approximately $3,470,000, $3,151,000, and $2,324,000, respectively, of
    internally sponsored research and development programs. Approximately 21
    professional employees were engaged full-time in research and development
    activities at September 28, 1996.

        (xii) Environmental Protection Regulations

        The Company believes that compliance with federal, state, and local
    environmental regulations will not have a material adverse effect on its
    capital expenditures, earnings, or competitive position.

        (xiii) Number of Employees

        As of September 28, 1996, the Company employed 280 people.
                                       A-9PAGE
<PAGE>
    (d) Financial Information about Exports by Domestic Operations

        Financial information about exports by domestic operations is
    summarized in Note 11 to Consolidated Financial Statements in the
    Registrant's Fiscal 1996 Annual Report to Shareholders and is
    incorporated herein by reference.

    (e)  Executive Officers of the Registrant

                                    Present Title (Fiscal Year First Became
         Name                  Age  Executive Officer)
         -------------------   ---  ---------------------------------------

         John C. Hansen        37   President and Chief Executive Officer
                                      (1995)
         John N. Hatsopoulos   62   Vice President and Chief Financial
                                      Officer (1992)
         Dr. Paul E. Cain      48   Vice President (1993)
         Mark H. Wurth         44   Vice President, Operations (1995)
         Charles K. Wittenberg 33   Vice President, Business Development
                                      (1996)
         Raymond D. Sphire     37   Vice President, Real Estate Design and
                                      Construction (1996)
         Paul F. Kelleher      54   Chief Accounting Officer (1992)

        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. Messrs. Hatsopoulos and Kelleher have
    held comparable positions for at least five years with Thermo Electron.
    Mr. Hansen has been President and Chief Executive Officer of the Company
    since May 1995. From 1990 until joining the Company, Mr. Hansen was
    President of Dolphin Acquisition Corp., which sells beauty products
    through a chain of retail outlets. Dr. Cain has been an officer of the
    Company since its acquisition of CBI in December 1993, president of CBI
    since its inception in 1982, and from 1982 until CBI's acquisition by the
    Company, Dr. Cain was a Director of CBI. Mr. Wurth has been Vice
    President, Operations, of the Company since June 1995. From February 1994
    until joining the Company, Mr. Wurth was Vice President, International
    and Southern California Operations, of Jenny Craig, Inc. From September
    1993 to February 1994, Mr. Wurth was Vice President/General Manager of
    Paging Network of Los Angeles, Inc. From 1990 to June 1993, Mr. Wurth
    held various positions at Nutri/System, Inc., most recently, as Chief
    Executive Officer, Australian Nutri/System Pty. Ltd. Mr. Wittenberg has
    been Vice President, Business Development of the Company since March
    1996. From January 1994 until joining the Company, Mr. Wittenberg was
    Associate General Counsel at Thermo Electron. From September 1990 until
    December 1993, Mr. Wittenberg was an attorney with Hale and Dorr. Mr.
    Sphire has been Vice President, Real Estate Development and Design, of
    the Company since June 1996. From September 1995 until June 1996, Mr.
    Sphire was Director of Real Estate and Design at the Company. From 1984
    until joining the Company, Mr. Sphire was a partner in The Holt Company,
    a real estate development company in California. Messrs. Hatsopoulos 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.