SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                   -------------------------------------------
                                   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 January 3, 1998

   [   ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934

                         Commission file number 1-14262

                             THERMOQUEST CORPORATION
             (Exact name of Registrant as specified in its charter)

   Delaware                                                         77-0407461
   (State or other jurisdiction of                            (I.R.S. Employer
   incorporation or organization)                          Identification No.)

   2215 Grand Avenue Parkway
   Austin, Texas                                                    78728-3812
   (Address of principal executive offices)                         (Zip Code)
       Registrant's telephone number, including area code: (781) 622-1000

           Securities registered pursuant to Section 12(b) of the Act:
          Title of each class        Name of each 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 (or for such shorter period that the
   Registrant was required to file such reports), 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, 1998, was approximately $85,279,000.

   As of January 30, 1998, the Registrant had 51,186,737 shares of Common
   Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

   Portions of the Registrant's Annual Report to Shareholders for the year
   ended January 3, 1998, are incorporated by reference into Parts I and II.

   Portions of the Registrant's definitive Proxy Statement for the Annual
   Meeting of Shareholders to be held on June 1, 1998, are incorporated by
   reference into Part III.
PAGE
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                                     PART I

    Item 1. Business
            --------

    (a) General Development of Business
        -------------------------------

        ThermoQuest Corporation (the Company or the Registrant) develops,
    manufactures, sells, and services analytical instruments, including mass
    spectrometers, liquid chromatographs, and gas chromatographs. These
    analytical instruments are used in the quantitative and qualitative
    chemical analysis of chemical compounds at ultratrace levels of
    detection. In addition, the Company develops, manufactures, sells, and
    services scientific equipment for the preparation and preservation of
    chemical samples; and consumables for the chromatography industry. The
    Company's products are used primarily by pharmaceutical companies for
    drug research, testing, and quality control; by environmental
    laboratories for testing water, air, and soil samples for compliance with
    environmental regulations; by chemical companies for research and quality
    control; by manufacturers for testing in certain industrial applications,
    such as the manufacture of silicon chips, and for quality control; by
    food and beverage companies for quality control and to test for product
    contamination; and in forensic applications. The Company was incorporated
    in June 1995 as a wholly owned subsidiary of Thermo Instrument Systems
    Inc. Thermo Instrument is a publicly traded, majority-owned subsidiary of
    Thermo Electron Corporation. Where the context requires, references
    herein to the Company refer to ThermoQuest Corporation and its
    subsidiaries and to its predecessor businesses as conducted by Thermo
    Instrument, the Company's parent, including acquired businesses from
    their dates of acquisition.

        The Company is a leading manufacturer of mass spectrometers and
    liquid chromatographs. In addition, the Company has recently entered the
    market for gas chromatographs. Many of the major developments in modern
    mass spectrometry were pioneered by the Company. The ion-trap mass
    spectrometer, which utilizes the latest mass spectrometer technology, was
    first commercialized by the Company. In 1995, the Company introduced two
    instruments that integrate a highly sensitive yet affordable ion-trap
    mass spectrometer with a liquid chromatograph or a gas chromatograph to
    form the industry's most powerful benchtop liquid chromatograph/mass
    spectrometer (LC/MS) and gas chromatograph/mass spectrometer (GC/MS)
    instruments.

        An element of the Company's strategy is to combine its internal
    growth with the acquisition of complementary products and technologies.
    Effective March 12, 1997, the Company acquired three business units
    within the Laboratory Products Group of Thermo Instrument's Life Sciences
    International PLC subsidiary, as well as Life Sciences' Hypersil
    operations, for approximately $156.9 million, net of a purchase price
    adjustment of $3.5 million to be received from Thermo Instrument in the
    first quarter of 1998. The purchase price consisted of: (i) $103.8
    million in cash, (ii) 1,000 shares of the Company's common stock valued
    at $15,750, and (iii) the assumption of $53.1 million of debt payable to
    Thermo Instrument. The Laboratory Products businesses develop,
    manufacture, sell, and service scientific equipment for the preparation 

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    and preservation of chemical samples. Hypersil develops, manufactures,
    and sells liquid chromatography media and columns used in
    high-performance liquid chromatography.

        In March 1997, the Company sold 1,768,500 shares of its common stock
    for net proceeds of $24.8 million. In March and April 1996, the Company
    sold 3,450,000 shares of its common stock in an initial public offering
    at $15.00 per share for net proceeds of $47.8 million. As of January 3,
    1998, Thermo Instrument owned 44,999,100 shares of the Company's common
    stock, representing 88% of such stock outstanding. Thermo Instrument
    intends, for the foreseeable future, to maintain at least 80% ownership
    of the Company. Thermo Instrument develops, manufactures, markets, and
    services instruments and software used for the identification and
    quantification of complex molecular compounds and elements in gases,
    liquids, and solids. Uses include pharmaceutical drug 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 (OEMs). As of
    January 3, 1998, Thermo Electron owned 59,300 shares of the Company's
    common stock, representing 0.12% of such stock outstanding. Thermo
    Electron provides analytical and monitoring instruments; biomedical
    products including heart-assist devices, respiratory-care equipment, and
    mammography systems; paper recycling and papermaking equipment;
    alternative-energy systems; industrial process equipment; and other
    specialized products. Thermo Electron also provides industrial
    outsourcing, particularly in environmental-liability management,
    laboratory analysis, and metallurgical processing, and conducts
    advanced-technology research and development.

    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 heading "Forward-looking
    Statements" in the Registrant's 1997* Annual Report to Shareholders,
    which statements are incorporated herein by reference.

    *   References to 1997, 1996, and 1995 herein are for the fiscal years
        ended January 3, 1998, December 28, 1996, and December 30, 1995,
        respectively.

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    (b) Financial Information About Industry Segments
        ---------------------------------------------

        The Company operates in one business segment: developing,
    manufacturing, selling, and servicing analytical instruments, including
    mass spectrometers, liquid chromatographs, and gas chromatographs; and
    scientific equipment for the preparation and preservation of chemical
    samples, as well as chromatography consumables.

    (c) Description of Business
        -----------------------

        (i)  Principal Products and Services
             -------------------------------

        The Company develops, manufactures, sells, and services analytical
    instruments, including mass spectrometers, liquid chromatographs, and gas
    chromatographs; and scientific equipment for the preparation and
    preservation of chemical samples, as well as chromatography consumables.
    The Company's products are sold to a wide range of customers primarily in
    the pharmaceutical, environmental, industrial/chemical, food and
    beverage, and forensic sciences industries. The market for the Company's
    products is highly specialized as a result of the differing needs of the
    industries in which they are used. The Company actively seeks to
    cross-sell its products among the various industries it serves,
    particularly by adding its liquid chromatograph or gas chromatograph
    input devices to its mass spectrometer products, and by introducing
    customers to the sample preparation and preservation equipment and
    chromatography consumables produced by the businesses acquired by the
    Company this year.

    Markets

        The major markets in which the Company sells its products are:

        Pharmaceutical. In the pharmaceutical industry, the Company's
    products are used in the identification of newly synthesized or
    discovered drug candidates, to measure drugs and metabolites in clinical
    studies, and for quality assurance of production drugs.

        Environmental. A second major market for the Company's products
    instruments is in environmental analysis. This market is driven to a
    great degree by federal, state, local, and foreign environmental
    regulations, which provide specific methods with respect to the testing
    of air, water, and soil for contaminants.

        Industrial/Chemical. Industrial and chemical customers typically
    utilize the Company's products for quality control and to test for
    contaminants in substances used in a particular manufacturing
    application.

        Food and Beverage. Customers in the food and beverage industry use
    the Company's products for quality control to test for contaminants.
    Customers in this industry must respond both to environmental and health
    regulations and to societal concerns regarding product contamination.

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        Forensic Sciences. The Company's products are used in a variety of
    forensic applications, including testing for illicit drug use by
    employees or athletes, testing body fluids to determine causes of death,
    testing to determine the identity of substances suspected to be illegal,
    and testing for the presence of substances of evidentiary significance
    for use in criminal investigations.

    Technology

    Analytical Instruments

        Mass Spectrometers. A mass spectrometer is an instrument in which the
    chemical compound to be analyzed is broken down into electrically-charged
    fragments (ions), and then sorted according to their mass-to-charge
    ratios. All mass spectrometers consist of a device to introduce samples,
    an ionization source, a mass analyzer that separates ions according to
    mass ratios, a detector that converts the ions into an electrical signal,
    a signal processor that amplifies the electrical signal, and a computer
    that organizes and displays information in a convenient and useful
    manner. The resulting data creates a "fingerprint" that is then compared
    to a database for identification. Mass spectrometers are the most
    powerful tools for the identification and quantification of chemical
    substances. A gas or liquid chromatograph is used to separate complex
    mixtures of chemicals into discrete components, which can then be
    analyzed based on the chromatograph results alone or can be introduced  
    into a mass spectrometer to give additional information and to
    specifically identify unknown components.

        The Company has pioneered many of the significant developments in
    mass spectrometry and holds numerous U.S. and international patents
    relating to mass spectrometry, with additional patents pending. The
    Company has a distinguished record of being the first to commercialize
    new technologies coming from its own laboratories as well as from an
    extensive worldwide network of university collaborators. Examples include
    the first computerized GC/MS quadrupole system, the first commercial
    chemical ionization ion source, the first commercial triple quadrupole
    MS/MS system, the first commercial ion-trap system, and the first
    commercial ion-trap MS/MS system.

        On January 19, 1996, the Company acquired Extrel FTMS, Inc., a
    leading manufacturer of Fourier transform mass spectrometry (FT/MS)
    instruments. Extrel introduced the first commercial FT/MS product in 1981
    and today offers a unique multisource mass spectrometer with a range of
    ionization techniques. This research-grade analytical instrument has the
    advantage of both high resolution and high mass range and is particularly
    useful in pharmaceutical and polymer research applications where large
    molecules in complex solutions need to be precisely identified.

        Effective January 1, 1996, the Company acquired the Automass division
    of Analytical Technology, Inc., a manufacturer of benchtop mass
    spectrometers, from Thermo Instrument. Manufactured near Paris, France,
    these mass spectrometers incorporate a quadrupole design that provides
    enhanced sensitivity and can accommodate gas chromatographs as well as 

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    liquid chromatographs. These products complement the Company's existing
    GCQ(R) and LCQ(R) line of benchtop ion-trap mass spectrometers.

        Effective March 29, 1996, the Company acquired MassLab Instruments, a
    manufacturer of mass spectrometry instruments, from Thermo Instrument.
    Located near Manchester, U.K., MassLab manufactures a line of mass
    spectrometers for both gas chromatography and liquid chromatography
    applications. MassLab was originally part of the Scientific Instruments
    Division of Fisons plc, a substantial portion of which was acquired by
    Thermo Instrument on March 29, 1996.

        The Company currently manufactures three types of mass spectrometers:

        Magnetic Sector Mass Spectrometers. Magnetic sector mass
    spectrometers are generally used in high-resolution applications where an
    accurate analysis of molecular weight is required to determine the
    elemental composition of unknown samples. Magnetic sector instruments are
    typically purchased by universities and pharmaceutical and chemical
    companies for use in research applications.

        Quadrupole Mass Spectrometers. Single quadrupole mass spectrometers
    are typically utilized in environmental and forensic laboratories, which
    require dependable, routine analyses that meet applicable regulatory
    requirements, such as those promulgated by the U.S. Environmental
    Protection Agency. Although lacking the resolution of some types of
    magnetic sector mass spectrometers, these instruments provide reliable
    performance at a relatively low price. Single quadrupoles are frequently
    combined to form MS/MS spectrometers for use in more complex analyses
    such as molecular structure analysis. Together with the Company's triple
    stage quadrupoles, the most powerful type of quadrupole mass
    spectrometer, single quadrupoles comprise a complete family of quadrupole
    mass spectrometers.

        Ion-trap Mass Spectrometers. The Company developed the first
    commercial ion-trap mass spectrometer. The ability to trap and integrate
    the intensities of ions has made the ion-trap the most sensitive method
    of mass analysis for certain applications. Ion traps are smaller,
    mechanically simpler, and therefore easier to maintain than other types
    of mass spectrometers. While other types of mass spectrometers separate
    and analyze a continuous stream of ions, ion-trap mass spectrometers trap
    ions in a confined space using an electric field, which can be adjusted
    to eject ions as a function of their mass-to-charge ratio. An advantage
    of ion-trap mass spectrometers is that, through software, MS/MS analysis
    can be performed in a single ion-trap mass spectrometer, theoretically to
    an infinite number of stages (MS(n)). The Company has recently introduced
    ion traps that incorporate an external ion source, such as those found in
    quadrupole and magnetic sector mass spectrometers, which use
    sophisticated ionization techniques to increase the specificity and
    detection limits of the instrument.

        Due to their relative mechanical simplicity and small size, ion traps
    are well suited for coupling with chromatographs to form benchtop LC/MS
    and GC/MS instruments. Benchtop LC/MS(n) instruments were not
    commercially available until the Company introduced the first such 

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    instrument in June 1995. Through significant advancements in integration
    techniques and information technology, the Company has developed the
    benchtop GCQ (GC/MS(n)) and LCQ (LC/MS(n)) instruments, which combine
    ion-trap mass spectrometers with chromatographs. These instruments are
    the first to allow users to combine GC and LC with MS(n) in a benchtop
    format, and offer high performance at a competitive price for appropriate
    applications.

        Liquid Chromatographs. High performance liquid chromatography (HPLC)
    is an analytical technique used to separate, identify, and quantify
    complex mixtures of primarily organic chemicals. In HPLC, the sample is
    introduced into a solvent stream that is being pumped at a high pressure
    through a liquid chromatography column. The column, both through physical
    and chemical properties, separates the complex mixtures into discrete
    bands, allowing identification. The separated sample is then passed
    through a detector that measures the sample by various technologies,
    including ultraviolet and visible light absorption, changes in refractive
    index, fluorescence, and conductivity. The data produced by the detector
    is converted to an electronic form and transmitted for display and
    manipulation on a personal computer. For complex mixtures, the HPLC may
    be coupled with a mass spectrometer to give additional information and
    specifically identify unknown components.

        Gas Chromatographs. Like HPLC, gas chromatography is an analytical
    technique used to separate, identify, and quantify complex mixtures of
    primarily organic chemicals. Although gas chromatographs are generally
    easier to use and have higher resolution than liquid chromatographs, only
    a relatively small percentage of compounds can be converted to gaseous
    form for analysis in a gas chromatograph. In gas chromatographs, samples
    are introduced typically by syringe injection and are converted into the
    gas phase by heating. The sample passes through an analytical column, and
    the various components of the sample mixture are separated into discrete
    bands which are suitable for analysis by detectors. Detectors can be
    assembled in various configurations to facilitate analysis of different
    chemical and physical properties in a sample mixture. The data produced
    by the detector is converted to electronic form and transmitted for
    display and manipulation on a personal computer. For complex mixtures,
    where compounds cannot be adequately separated and identified by gas
    chromatography, the gas chromatograph can be coupled with a mass
    spectrometer to give additional information and specifically identify
    unknown components.

        Effective March 29, 1996, the Company acquired CE Instruments, a
    manufacturer of gas chromatography instruments, from Thermo Instrument.
    Located near Milan, Italy, CE Instruments has a long history of
    technological innovation in gas chromatography. In 1956, CE Instruments
    produced the first commercial gas chromatograph manufactured in Europe,
    and, in 1976, introduced the first commercially available high-resolution
    gas chromatograph. In addition to gas chromatography instruments, CE
    Instruments produces a line of organic elemental analysis, mercury
    porosimetry, and gas absorption instruments for use in research and
    quality control laboratories in a number of application fields. CE
    Instruments was originally part of the Scientific Instruments Division of

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    Fisons, a substantial portion of which was acquired by Thermo Instrument
    on March 29, 1996.

    Sample Preparation Equipment

        Biological Safety Cabinet. This cabinet protects the researcher, the
    sample being examined, and the laboratory environment, by providing a
    partially enclosed work space that uses a combination of fans to
    circulate air and filters to trap harmful biological substances.

        Cell Culture Incubator. This device controls temperature, relative
    humidity, and carbon dioxide and oxygen levels to provide the perfect
    in-vitro environment for cell growth. Cell culture incubators are used in
    research and clinical laboratories throughout the world for growing
    mammalian cells, bacteria, and viruses.

        Centrifugal Vacuum Concentrator. This equipment uses a rotational
    spinning concentrator, refrigerated vapor trap, and vacuum source to dry
    multiple samples for analysis, without losing portions of them, or
    cross-contaminating them. 

        Centrifuge. This equipment is used to prepare laboratory samples for
    analysis by spinning them around a central axis to separate materials of
    different specific gravities.

        Electrophoresis System. This system prepares a biological sample for
    analysis by using electricity to separate DNA/RNA and protein molecules
    based upon electrophoretic mobility.

        Orbital Shaker. This equipment, used in research and fermentation
    laboratories, provides a controlled orbital motion for biological
    cultures in glass flasks. The orbital agitation of the culture provides
    increased oxygen for optimal cell growth. Combination incubators/orbital
    shakers provide precise conditions of temperature and orbital agitation.

    Sample Preservation Equipment

        Ultra-low Temperature Freezer. This specially designed cascade
    refrigeration system is designed to store all types of biological
    material, providing storage temperatures down to -86 degrees Celsius.

        Cryopreservation System. This vacuum-insulated equipment controls
    liquid nitrogen to produce extremely low temperatures, as low as -196
    degrees Celsius, in order to store biological material, such as bone
    marrow, cornea, heart valves, spermatozoa, bacteria, and viruses, for
    very long periods of time.

    Chromatography Consumables

        High-performance Liquid Chromatography Columns. These tubes are
    packed with materials that have the ability to separate complex mixtures
    into their individual ingredients.

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    Sales and Marketing

        The Company markets its products in larger international markets
    through its own worldwide sales force of direct salespeople, and in
    smaller markets through a network of dealers and distributors. In
    addition, the Company sells certain of its liquid and gas chromatographs
    pursuant to OEM arrangements under which third parties purchase and
    resell the Company's products. The Company's sales force is supported
    throughout the world by a customer support group which provides training,
    instrument servicing, and parts replacements.

        (ii) and (xi)  New Products; Research and Development

        The Company maintains active programs for the development of new
    technologies and the enhancement of existing products. Research and
    development expenses for the Company were $28.2 million, $21.8 million,
    and $17.5 million in 1997, 1996, and 1995, respectively.

        (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,
    including applying for and obtaining patents when appropriate. The
    Company holds numerous patents related to its technologies, with
    additional patents pending. The Company also enters into licensing
    agreements with other companies in which it grants or receives rights to
    specific patents and technical know-how. The Company also considers
    technical know-how, trade secrets, and trademarks to be important to its
    business.

        (v)  Seasonal Influences

        There are no significant seasonal influences on the Company's sales
    of its products.

        (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 10% or more of the Company's total
    revenues in any of the past three years.
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        (viii)  Backlog

        The Company's backlog of firm orders was $52.6 million and $63.3
    million as of January 3, 1998, and December 28, 1996, respectively. The
    Company includes in its backlog only orders confirmed with a purchase
    order for products and related services scheduled to be shipped or
    rendered within one year. Certain of such firm orders are cancelable by
    the customer upon payment of a cancellation charge. The Company believes
    that substantially all of the backlog at January 3, 1998, will be shipped
    or completed during 1998. The Company does not believe that the level of,
    or changes in the level of, its backlog is necessarily a meaningful
    indicator of future results of operations.

        (ix)  Government Contracts

        Not applicable.

        (x)  Competition

        The Company competes in each of its markets primarily on technical
    performance, customer service and support and, to a lesser extent, price.
    The Company's principal competitors in the mass spectrometry market
    include Hewlett-Packard Company, the MicroMass Group of Waters
    Technologies Corporation, Shimadzu Corporation, and Perkin-Elmer
    Corporation. The Company's principal competitors in the liquid
    chromatography market include Waters, Hewlett-Packard, Shimadzu, and
    Perkin-Elmer. In the gas chromatography market, the Company competes with
    numerous companies including Hewlett-Packard, Varian Associates,
    Perkin-Elmer, and Shimadzu.

        The Company's principal competitors in the sample preparation and
    preservation markets include Jouan S.A., NuAire, Sanyo Electric, and  
    Labconco.

        The Company's principal competitors in the chromatography consumables
    market include Waters, Merck, Phenomenex, and numerous regional
    suppliers.

        (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 3, 1998, the Company employed approximately 2,090
    people.


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    (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 1997 Annual Report to Shareholders, which
    information is incorporated herein by reference.

    (e) Executive Officers of the Registrant

                                       Present Title (Year First Became
    Name                        Age    Executive Officer)
    ------------------------    ---    --------------------------------
    Dr. Richard W.K. Chapman     53    Chief Executive Officer and
                                         President (1995)
    John N. Hatsopoulos *        63    Chief Financial Officer and 
                                         Senior Vice President (1995)
    Philip L. Warren             54    Vice President (1995)
    Paul F. Kelleher             55    Chief Accounting Officer (1995)

    * John N. Hatsopoulos and George N. Hatsopoulos, a director of the
      Company, are brothers.

      Each executive officer serves until his successor is chosen or
    appointed by the Board of Directors and qualified or until his earlier
    resignation, death, or removal. Messrs. Hatsopoulos and Kelleher have
    held comparable positions for at least five years with Thermo Instrument
    and Thermo Electron. Dr. Chapman and Mr. Warren have held their
    respective positions in the Company since its inception in June 1995. Dr.
    Chapman served as President of Finnigan Corporation, a subsidiary of the
    Company, from 1992 to 1995. Mr. Warren was named President of Finnigan in
    September 1995, and served as Finnigan's Vice President, Field Operations
    from 1985 to May 1994 and as its Vice President, General Manager from May
    1994 until he was named President. Messrs. Hatsopoulos and Kelleher are
    full-time employees of Thermo Electron and certain of its subsidiaries,
    but devote such time to the affairs of the Company as the Company's needs
    reasonably require.

    Item 2. Properties

        The Company owns approximately 1,038,000 square feet of office,
    engineering, laboratory, and production space, principally in Ohio,
    California, Texas, Massachusetts, Germany, and Italy and leases
    approximately 291,000 square feet of office space under leases expiring
    from 1998 through 2014, principally in New York, England, Germany,
    France, Japan, and the Netherlands. As of January 3, 1998, the Company
    had an $8.3 million mortgage loan that is secured by 200,000 square feet
    of property in California with a net book value of $15.8 million. The
    Company believes that its facilities are in good condition and are
    suitable and adequate for its present operations and that suitable space
    is readily available if any of such leases are not extended. With respect
    to leases expiring in the near future, in the event the Company does not
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    renew such leases, the Company believes suitable alternate space is
    available for lease on acceptable terms.


    Item 3. Legal Proceedings
            -----------------

        The Company's Finnigan subsidiary has filed complaints against
    Bruker-Franzen Analytik GmbH and its U.S. affiliate, and Hewlett-Packard,
    for alleged violation of two U.S. patents owned by Finnigan. The patents
    pertain to methods used in ion-trap mass spectrometers.
        One of Finnigan's complaints was filed in the United States District
    Court for the District of Massachusetts, and the other was filed with the
    United States International Trade Commission (ITC) in Washington, DC.
    Finnigan has asked for damages to compensate for the infringements, for
    injunctions against further infringement, and for an order excluding
    further imports into the U.S. of ion-trap mass spectrometers that use the
    patented methods.
        The District Court action has, at the request of Hewlett-Packard and
    Bruker, been stayed pending completion of an investigation by the ITC. In
    February 1998, an administrative law judge at the ITC issued an initial
    determination to the effect that, although one of Finnigan's patents was
    infringed, the patents were invalid for purposes of this case. The ITC's
    jurisdiction in this matter is limited to the issue of whether or not the
    defendant's products can be imported into the U.S. The judge's initial
    determination will be considered by the full commission during the second
    quarter of 1998.
        Bruker presented counterclaims in the ITC investigation. The
    counterclaims, which have been removed to the District Court in
    Massachusetts, allege that the Finnigan patents are invalid and
    unenforceable and are not infringed by the mass spectrometers co-marketed
    by Bruker. They also allege that Finnigan has violated U.S. and
    Massachusetts antitrust laws and engaged in unfair competition by
    attempting to maintain a monopoly position and restrain trade through
    enforcement of allegedly fraudulently obtained patents. Bruker has asked
    for judgment consistent with its counterclaims, and for three times the
    antitrust damages (including attorneys' fees) it has sustained.
        There can be no assurance as to the outcome of these matters or that
    an unfavorable resolution would not have a material adverse effect on the
    Company's future results of operations and financial position.


    Item 4. Submission of Matters to a Vote of Security Holders
            ---------------------------------------------------

        Not applicable.

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                                     PART II

    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 dividend policy is
    included under the sections labeled "Common Stock Market Information" and
    "Dividend Policy" in the Registrant's 1997 Annual Report to Shareholders
    and is incorporated herein by reference.

        On March 24, 1997, the Company sold 1,768,500 shares of its common
    stock, at a price of $15.00 per share, in a private placement to
    accredited investors in reliance on Regulation D promulgated under the
    Securities Act of 1933. Lehman Brothers Inc. and Goldman, Sachs & Co.
    acted as placement agents in connection with the private placement. The
    aggregate fees paid to the placement agents for introducing prospective
    investors to the Company were $1,592,000, or 6% of the gross proceeds of
    the private placement.

    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 1997 Annual Report to Shareholders and is
    incorporated herein by reference.

    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 1997 Annual Report to
    Shareholders and is incorporated herein by reference.

    Item 8. Financial Statements and Supplementary Data

        The Registrant's Consolidated Financial Statements as of January 3,
    1998, and Supplementary Data are included in the Registrant's 1997 Annual
    Report to Shareholders and are incorporated herein by reference.

    Item 9. Changes in and Disagreements with Accountants on Accounting and
            Financial Disclosure

        Not applicable.
                                       13PAGE
<PAGE>
                                    PART III

    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 caption "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. 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. 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. 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.





                                       14PAGE
<PAGE>
                                     PART IV

    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 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
              -------------------

              None.


      (c)     Exhibits
              --------

              See Exhibit Index on the page immediately preceding exhibits.


                                       15PAGE
<PAGE>
                                   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 17, 1998            THERMOQUEST CORPORATION

                                    By: Richard W.K. Chapman
                                        ------------------------
                                        Richard W.K. Chapman
                                        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 below, as of March 17,
    1998.

    Signature                          Title
    ---------                          -----

    By: Richard W.K. Chapman        President, Chief Executive Officer,
        -------------------------        and Director
        Richard W.K. Chapman     

    By: John N. Hatsopoulos        Chief Financial Officer and Senior
        -------------------------        Vice President
        John N. Hatsopoulos      

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

    By: Earl R. Lewis              Chairman of the Board and Director
        -------------------------
        Earl R. Lewis

    By: George N. Hatsopoulos      Director
        -------------------------
        George N. Hatsopoulos

    By: Frank Jungers              Director
        -------------------------
        Frank Jungers

    By: Anthony J. Pellegrino      Director
        -------------------------
        Anthony J. Pellegrino

    By: Michael E. Porter          Director
        -------------------------
        Michael E. Porter


    By: Arvin H. Smith             Director
        -------------------------
        Arvin H. Smith
                                       16PAGE
<PAGE>
                    Report of Independent Public Accountants
                    ----------------------------------------


    To the Shareholders and Board of Directors of ThermoQuest Corporation:

        We have audited, in accordance with generally accepted auditing
    standards, the consolidated financial statements included in ThermoQuest
    Corporation's Annual Report to Shareholders incorporated by reference in
    this Form 10-K, and have issued our report thereon dated February 17,
    1998. 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 15 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 17, 1998



                                       17PAGE
<PAGE>
SCHEDULE II



                             THERMOQUEST CORPORATION

                        Valuation and Qualifying Accounts
                                 (In thousands)


                  Balance at   Provision             Accounts            Balance
                   Beginning  Charged to  Bad Debts   Written             at End
                     of Year     Expense  Recovered       Off Other (a)  of Year
                  ----------   ---------  ---------  -------- --------- --------
Allowance for
  Doubtful Accounts

Year Ended
  January 3, 1998     $4,459      $  549     $   33    $ (760)  $   80    $4,361

Year Ended
  December 28, 1996   $2,341      $  220     $   43    $ (351)  $2,206    $4,459

Year Ended
  December 30, 1995   $2,366      $  213     $   68    $ (333)  $   27    $2,341



------------
(a) Includes allowance of businesses acquired during the year as described in
    Note 3 to Consolidated Financial Statements in the Registrant's 1997 Annual
    Report to Shareholders and the effect of foreign currency translation.



                                       18PAGE
<PAGE>
                                  EXHIBIT INDEX


    Exhibit
    Number       Description of Exhibit
    ------------------------------------------------------------------------
      2.1        Stock Purchase Agreement dated as of November 4, 1996,
                 between SID Instruments Inc. and the Registrant (filed as
                 Exhibit 2.1 to the Registrant's Quarterly Report on Form
                 10-Q for the quarter ended September 28, 1996 [File No.
                 1-14262] and incorporated herein by reference).

      2.2        Stock Purchase Agreement dated as of November 4, 1996,
                 among SID Instruments Inc., Thermo Instrument, and Finnigan
                 MAT (Nevada) Inc. (filed as Exhibit 2.2 to the Registrant's
                 Quarterly Report on Form 10-Q for the quarter ended
                 September 28, 1996 [File No. 1-14262] and incorporated
                 herein by reference).

      2.3        Asset and Share Purchase Agreement dated as of July 30,
                 1997, between the Registrant and Thermo Instrument (filed
                 as Exhibit 2 to the Registrant's Quarterly Report on Form
                 10-Q for the quarter ended June 28, 1997 [File No. 1-14262]
                 and incorporated herein by reference).

      3.1        Certificate of Incorporation, as amended, of the Registrant
                 (filed as Exhibit 3.1 to the Registrant's Registration
                 Statement on Form S-1 [Reg. No. 333-00276] and incorporated
                 herein by reference).

      3.2        By-laws of the Registrant (filed as Exhibit 3.2 to the
                 Registrant's Registration Statement on Form S-1 [Reg. No.
                 333-00276] and incorporated herein by reference).

     10.1        Corporate Services Agreement dated as of June 30, 1995,
                 between Thermo Electron and the Registrant (filed as
                 Exhibit 10.1 to the Registrant's Registration Statement on
                 Form S-1 [Reg. No. 333-00276] and incorporated herein by
                 reference).

     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 2, 1993 [File No. 1-8002] and incorporated
                 herein by reference).

     10.3        Tax Allocation Agreement dated as of June 30, 1995, between
                 Thermo Electron and the Registrant (filed as Exhibit 10.3
                 to the Registrant's Registration Statement on Form S-1
                 [Reg. No. 333-00276] and incorporated herein by reference).

     10.4        Amended and Restated Master Repurchase Agreement dated as
                 of June 30, 1995, between Thermo Electron and the
                 Registrant.

                                       19PAGE
<PAGE>
                                  EXHIBIT INDEX


    Exhibit
    Number       Description of Exhibit
    ------------------------------------------------------------------------
     10.5        Amended and Restated Master Guarantee Reimbursement and
                 Loan Agreement dated December 2, 1997, by and among Thermo
                 Electron and the Registrant (filed as Exhibit 10.7 to
                 Thermo Instrument's Annual Report on Form 10-K for the
                 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 December 2, 1997, by and among Thermo
                 Instrument and the Registrant.

     10.7        Equity Incentive Plan of the Registrant (filed as Exhibit
                 10.7 to the Company's Registration Statement on Form S-1
                 [Reg. No. 333-00276] and incorporated herein by reference).

     10.8        Deferred Compensation Plan for Directors of the Registrant
                 (filed as Exhibit 10.8 to the Registrant's Registration
                 Statement on Form S-1 [Reg. No. 333-00276] and incorporated
                 herein by reference).

     10.9        Directors Stock Option Plan of the Registrant (filed as
                 Exhibit 10.9 to the Registrant's Registration Statement on
                 Form S-1 [Reg. No. 333-00276] and incorporated herein by
                 reference).

     10.10       Form of Indemnification Agreement for Officers and
                 Directors (filed as Exhibit 10.10 to the Registrant's
                 Registration Statement on Form S-1 [Reg. No. 333-00276] and
                 incorporated herein by reference).

                 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 to such affiliated corporations. The
                 terms of such plans are substantially the same as those of
                 the Registrant's Equity Incentive Plan.

     10.11       Fiscal Agency Agreement dated as of August 3, 1995, among
                 the Registrant, Thermo Electron, and The Chase Manhatten
                 Bank (formerly Chemical Bank) (filed as Exhibit 10.12 to
                 the Registrant's Registration Statement on Form S-1 [Reg.
                 No. 333-00276] and incorporated herein by reference).

      10.12      Deed of Trust and Security Agreement dated February 22,
                 1989, between the Company (as successor-in-interest to
                 Finnigan Properties, Inc.) and the Northwestern Mutual Life
                 Insurance Company (filed as Exhibit 10.13 to the
                 Registrant's Registration Statement on Form S-1 [Reg. No.
                 333-00276] and incorporated herein by reference).

                                       20PAGE
<PAGE>
                                  EXHIBIT INDEX


    Exhibit
    Number       Description of Exhibit
    ------------------------------------------------------------------------
     10.13       Indemnification Agreement dated as of November 4, 1996,
                 between Thermo Instrument and the Registrant (filed as
                 Exhibit 10.1 to the Registrant's Quarterly Report on Form
                 10-Q for the quarter ended September 28, 1996 [File No.
                 1-14262] and incorporated herein by reference).

     10.14       Amended and Restated Stock Holdings Assistance Plan and
                 Form of Promissory Note.

     13          Annual Report to Shareholders for the Year Ended
                 January 3, 1998 (only those portions incorporated
                 herein by reference).

     21          Subsidiaries of the Registrant.

     23          Consent of Arthur Andersen LLP.

     27.1        Financial Data Schedule for the Year Ended January 3,
                 1998.

     27.2        Financial Data Schedule for the Quarter Ended
                 September 27, 1997 (restated for the adoption of SFAS
                 No. 128).