Exhibit 13




















                         THERMO BIOANALYSIS CORPORATION

                        Consolidated Financial Statements

                                      1997
PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                      Consolidated Statement of Operations

    (In thousands except per share amounts)      1997       1996        1995
    ------------------------------------------------------------------------
    Revenues (includes $14,034, $6,298,
      and $1,834 to affiliated companies;
      Notes 6 and 8)                         $139,454   $ 71,649    $ 22,534
                                             --------   --------    --------
    Costs and Operating Expenses:
      Cost of revenues (includes $7,449, 
        $1,842, and $797 for affiliated 
        company revenues; Note 6)              65,895     37,807      13,036
      Selling, general, and administrative
        expenses (Note 6)                      46,300     20,987       4,804
      Research and development expenses        11,670      7,298       1,325
      Write-off of acquired technology
        (Note 2)                                    -      3,500           -
                                             --------   --------    --------
                                              123,865     69,592      19,165
                                             --------   --------    --------

    Operating Income                           15,589      2,057       3,369

    Interest Income                             2,027      1,280         819
    Interest Expense, Related Party (Note 6)   (4,723)    (1,873)          -
                                             --------   --------    --------
    Income Before Provision for Income Taxes   12,893      1,464       4,188
    Provision for Income Taxes (Note 4)         4,642      1,900       1,674
                                             --------   --------    --------
    Net Income (Loss)                        $  8,251   $   (436)   $  2,514
                                             ========   ========    ========

    Earnings (Loss) per Share (Note 9):
      Basic                                  $    .76   $   (.05)   $    .33
                                             ========   ========    ========
      Diluted                                $    .70   $   (.05)   $    .33
                                             ========   ========    ========
    Weighted Average Shares (Note 9):
      Basic                                    10,816      8,542       7,694
                                             ========   ========    ========
      Diluted                                  13,951      8,542       7,694
                                             ========   ========    ========


    The accompanying notes are an integral part of these consolidated
    financial statements.


                                         2PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Consolidated Balance Sheet

    (In thousands)                                          1997        1996
    ------------------------------------------------------------------------
    Assets
    Current Assets:
      Cash and cash equivalents                         $ 19,759    $ 45,476
      Accounts receivable, less allowances of $5,085
        and $991                                          31,340      17,265
      Inventories                                         23,905      14,592
      Prepaid income taxes (Note 4)                        7,393       2,319
      Prepaid expenses and other current assets            3,428         618
      Due from parent company and affiliated companies
        (Note 2)                                           4,785         965
                                                        --------    --------
                                                          90,610      81,235
                                                        --------    --------
    Property, Plant, and Equipment, at Cost, Net          13,824       5,547
                                                        --------    --------
    Other Assets                                           2,711       3,098
                                                        --------    --------
    Cost in Excess of Net Assets of Acquired
      Companies (Note 2)                                  95,764      33,117
                                                        --------    --------
                                                        $202,909    $122,997
                                                        ========    ========



                                         3PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                     Consolidated Balance Sheet (continued)

    (In thousands except share amounts)                     1997        1996
    ------------------------------------------------------------------------
    Liabilities and Shareholders' Investment
    Current Liabilities:
      Accounts payable                                  $  7,427    $  4,282
      Accrued payroll and employee benefits                6,519       2,616
      Accrued income taxes                                 5,198       2,775
      Accrued acquisition expenses (Note 2)                2,668       1,857
      Accrued installation and warranty costs              2,237         891
      Other accrued expenses                               7,758       4,903
      Deferred revenue                                     2,907       4,161
                                                        --------    --------
                                                          34,714      21,485
                                                        --------    --------
    Deferred Income Taxes (Note 4)                           139         196
                                                        --------    --------
    Long-term Obligations:
      Payable to parent company (Note 6)                  50,000           -
      Subordinated convertible note, due to
        parent company (Note 6)                           50,000      50,000
      Other                                                  204           -
                                                        --------    --------
                                                         100,204      50,000
                                                        --------    --------
    Commitments and Contingency (Note 5)

    Shareholders' Investment (Notes 2, 3, and 7):
      Common stock, $.01 par value, 25,000,000 shares
        authorized; 11,073,518 and 9,771,500 shares
        issued and outstanding                               111          98
      Capital in excess of par value                      64,848      47,882
      Retained earnings                                    9,958       1,707
      Cumulative translation adjustment                   (7,065)      1,629
                                                        --------    --------
                                                          67,852      51,316
                                                        --------    --------
                                                        $202,909    $122,997
                                                        ========    ========


    The accompanying notes are an integral part of these consolidated
    financial statements.


                                         4PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                      Consolidated Statement of Cash Flows

    (In thousands)                                1997       1996       1995
    ------------------------------------------------------------------------
    Operating Activities:
      Net income (loss)                       $  8,251  $   (436)   $  2,514
      Adjustments to reconcile net income
        (loss) to net cash provided by
        operating activities:
          Depreciation and amortization          6,839     3,002         346
          Provision for losses on accounts
            receivable                             528       210           -
          Deferred income tax expense
            (benefit)                             (947)       10         (60)
          Write-off of acquired technology
            (Note 2)                                 -     3,500           -
          Other                                    (60)       34           -
          Changes in current accounts,
            excluding the effects of
            acquisitions:
              Accounts receivable               (6,884)   (2,091)        388
              Inventories                       (1,804)      548        (303)
              Other current assets                (826)      817        (698)
              Accounts payable                    (504)    1,706        (384)
              Other current liabilities          3,492     1,323         (41)
                                              --------  --------    --------
    Net cash provided by operating
      activities                                 8,085     8,623       1,762
                                              --------  --------    --------
    Investing Activities:
      Acquisitions, net of cash acquired
        (Note 2)                               (29,071)  (50,698)          -
      Refund of acquisition purchase
        price (Note 2)                             955         -           -
      Purchases of property, plant, and
        equipment                               (3,108)   (1,476)       (313)
      Other                                        103         -        (183)
                                              --------  --------    --------
    Net cash used in investing activities     $(31,121) $(52,174)   $   (496)
                                              --------  --------    --------




                                         5PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                Consolidated Statement of Cash Flows (continued)

    (In thousands)                                  1997      1996      1995
    ------------------------------------------------------------------------
    Financing Activities:
      Net proceeds from issuance of Company
        common stock (Note 7)                   $     21  $ 20,782  $ 14,918
      Proceeds from issuance of subordinated
        convertible note to parent company
        (Note 6)                                       -    50,000         -
      Proceeds from issuance of note payable
        to Thermo Electron (Note 6)                    -    30,000         -
      Repayment of note payable to Thermo
        Electron (Note 6)                              -   (30,000)        -
      Transfer from parent company to fund
        income tax payments                            -         -     1,930
      Net transfer to parent company                   -         -      (383)
      Other                                            -        58         -
                                                --------  --------  --------
    Net cash provided by financing 
      activities                                      21    70,840    16,465
                                                --------  --------  --------
    Exchange Rate Effect on Cash                  (2,702)      440        (5)
                                                --------  --------  --------
    Increase (Decrease) in Cash and Cash 
      Equivalents                                (25,717)   27,729    17,726
    Cash and Cash Equivalents at Beginning
      of Year                                     45,476    17,747        21
                                                --------  --------  --------
    Cash and Cash Equivalents at End
      of Year                                   $ 19,759  $ 45,476  $ 17,747
                                                ========  ========  ========

    Cash Paid For:
      Interest                                  $  4,723  $  1,848  $      -
      Income taxes                              $  4,918  $    536  $  1,930

    Noncash Activities:
      Fair value of assets of acquired
        companies, including cash acquired
        of $11,982 in 1997                      $120,224  $ 68,356  $      -
      Cash paid for acquired companies           (41,053)  (52,191)        -
      Company common stock issuable for
        acquired companies                       (16,868)        -         -
      Amount payable to parent company           (50,000)        -         -
      Adjustments to purchase price due from
        parent company for acquired companies
        (Note 2)                                   9,075         -         -
                                                --------  --------  --------
        Liabilities assumed of acquired
          companies                             $ 21,378  $ 16,165  $      -
                                                ========  ========  ========

    The accompanying notes are an integral part of these consolidated
    financial statements.

                                         6PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

               Consolidated Statement of Shareholders' Investment

    (In thousands)                                1997      1996        1995
    ------------------------------------------------------------------------

    Common Stock, $.01 Par Value
      Balance at beginning of year           $     98   $     81    $      -
      Capitalization of Company                     -          -          65
      Net proceeds from issuance of
        Company common stock (Note 7)               -         17          16
      Stock issuable to Thermo Instrument
        for acquisition of the Labsystems OY
        and Hybaid divisions of LSI (Note 2)       13          -           -
                                             --------   --------    --------
      Balance at end of year                      111         98          81
                                             --------   --------    --------
                                                  
    Capital in Excess of Par Value
      Balance at beginning of year             47,882     26,917           -
      Capitalization of Company                     -          -      12,015
      Net proceeds from issuance of
        Company common stock (Note 7)              21     20,765      14,902
      Tax benefit related to employees'
        and directors' stock plans                 90        200           -
      Stock issuable to Thermo Instrument 
        for acquisition of the Labsystems OY
        and Hybaid divisions of LSI (Note 2)   16,855          -           -
                                             --------   --------    --------
      Balance at end of year                   64,848     47,882      26,917
                                             --------   --------    --------
    Retained Earnings
      Balance at beginning of year              1,707      2,143           -
      Net income (loss) after
        capitalization of Company               8,251       (436)      2,143
                                             --------   --------    --------
      Balance at end of year                    9,958      1,707       2,143
                                             --------   --------    --------
    Cumulative Translation Adjustment
      Balance at beginning of year              1,629          5           -
      Translation adjustment                   (8,694)     1,624           5
                                             --------   --------    --------
      Balance at end of year                   (7,065)     1,629           5
                                             --------   --------    --------
    Net Parent Company Investment
      Balance at beginning of year                  -          -      10,162
      Net income prior to
        capitalization of Company                   -          -         371
      Net transfer from parent company              -          -       1,547
      Capitalization of Company                     -          -     (12,080)
                                             --------   --------    --------
      Balance at end of year                        -          -           -
                                             --------   --------    --------
    Total Shareholders' Investment           $ 67,852   $ 51,316    $ 29,146
                                             ========   ========    ========


    The accompanying notes are an integral part of these consolidated
    financial statements.

                                         7PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    1.  Nature of Operations and Summary of Significant Accounting Policies

    Nature of Operations
        The Company has three principal product lines: life sciences
    instrumentation, consumables, and information management systems. The
    Company's life sciences instrumentation and consumables are based on
    proprietary immunoassay, optical biosensor, polymerase chain reaction
    (PCR), liquid-handling, mass spectrometry, capillary electrophoresis
    (CE), and radiation measurement technologies. The Company's information
    management systems subsidiary designs, implements, and supports
    laboratory information management systems (LIMS) and chromatography data
    systems.

    Relationship With Thermo Instrument Systems Inc. and Thermo Electron
    Corporation
        The Company was incorporated in February 1995 as a wholly owned
    subsidiary of Thermo Instrument Systems Inc., at which time Thermo
    Instrument transferred to the Company the assets related to certain
    elements of its Thermo Separation Products Inc. CE product line, its
    Finnigan MAT Ltd. MALDI-TOF division, and its Eberline Instruments health
    physics instrumentation division in exchange for 6,500,000 shares of the
    Company's common stock. As of January 3, 1998, Thermo Instrument owned
    7,799,000 shares of the Company's common stock, representing 70% of such
    stock outstanding. Such shares include the 1,300,000 shares issuable to
    Thermo Instrument in connection with the acquisition of the Labsystems OY
    and Hybaid divisions of LSI (Note 2). Thermo Instrument is an 82%-owned
    subsidiary of Thermo Electron Corporation. As of January 3, 1998, Thermo
    Electron owned 788,967 shares of the Company's common stock, representing
    7% of such stock outstanding.

    Principles of Consolidation
        The accompanying financial statements include the accounts of the
    Company and its wholly owned subsidiaries. All material intercompany
    accounts and transactions have been eliminated.

    Fiscal Year
        The Company has adopted a fiscal year ending the Saturday nearest
    December 31. References to 1997, 1996, and 1995 are for the fiscal years
    ended January 3, 1998, December 28, 1996, and December 30, 1995,
    respectively. Fiscal year 1997 included 53 weeks; 1996 and 1995 each
    included 52 weeks.

    Revenue Recognition
        The Company recognizes revenue upon shipment of its products. The
    Company provides a reserve for its estimate of warranty and installation
    costs at the time of shipment. The Company recognizes revenue from
    service contracts over the respective terms of the contracts. Information
    management systems revenue is recognized upon execution of the license
    agreement and delivery of the software when any ongoing service
    commitments are not critical to the functionality of the software;
    otherwise revenue on both the service and software components is
    recognized based on long-term contract accounting. Revenue from software

                                         8PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    1.  Nature of Operations and Summary of Significant Accounting Policies
        (continued)

    maintenance contracts, including amounts bundled in initial software
    licenses, is recognized ratably over the term of the contract. Deferred
    revenue in the accompanying 1997 balance sheet consists of unearned
    revenue on service contracts and maintenance contracts, which will be
    recognized within one year.

    Software Development Costs
        In accordance with Statement of Financial Accounting Standards (SFAS)
    No. 86, "Accounting for the Costs of Computer Software to be Sold,
    Leased, or Otherwise Marketed," software development costs are expensed
    as incurred until technological feasibility has been established. The
    Company believes that, under its current process for developing software,
    the software is essentially completed concurrently with the establishment
    of technological feasibility. Accordingly, no software development costs
    have been capitalized except for software recorded in connection with an
    acquisition (see "Other Assets").

    Stock-based Compensation Plans
        The Company applies Accounting Principles Board Opinion (APB) No. 25,
    "Accounting for Stock Issued to Employees" and related interpretations in
    accounting for its stock-based compensation plans (Note 3). Accordingly,
    no accounting recognition is given to stock options granted at fair
    market value until they are exercised. Upon exercise, net proceeds,
    including tax benefits realized, are credited to equity.

    Income Taxes
        In the period prior to the Company's initial public offering, the
    Company and Thermo Instrument were included in Thermo Electron's
    consolidated federal and certain state income tax returns. Subsequent to
    the Company's initial public offering in September 1996, Thermo
    Instrument's equity ownership of the Company was reduced below 80%, and
    as a result, the Company is required to file its own federal income tax
    return.
        In accordance with SFAS No. 109, "Accounting for Income Taxes," the
    Company recognizes deferred income taxes based on the expected future tax
    consequences of differences between the financial statement basis and the
    tax basis of assets and liabilities, calculated using enacted tax rates
    in effect for the year in which the differences are expected to be
    reflected in the tax return.

    Earnings (Loss) per Share
        During the fourth quarter of 1997, the Company adopted SFAS No. 128,
    "Earnings per Share" (Note 9). As a result, all previously reported
    earnings per share have been restated; however, basic and diluted loss
    per share equal the Company's previously reported loss per share for
    1996. Basic earnings per share have been computed by dividing net income
    by the weighted average number of shares outstanding during the year.
    Diluted earnings per share have been computed assuming the conversion of
    convertible obligations and the elimination of the related interest 

                                         9PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    1.  Nature of Operations and Summary of Significant Accounting Policies
        (continued)

    expense, and the exercise of stock options, as well as their related
    income tax effects. For periods prior to the Company's February 1995
    capitalization, shares issued in connection with such capitalization have
    been shown as outstanding for purposes of computing earnings per share.

    Cash and Cash Equivalents
        At year-end 1997 and 1996, $10,158,000 and $39,649,000, respectively,
    of the Company's cash equivalents were invested in a repurchase agreement
    with Thermo Electron. Under this agreement, the Company in effect lends
    excess cash to Thermo Electron, which Thermo Electron collateralizes with
    investments principally consisting of corporate notes, commercial paper,
    U.S. government-agency securities, money market funds, and other
    marketable securities, in the amount of at least 103% of such obligation.
    The Company's funds subject to the repurchase agreement are readily
    convertible into cash by the Company. The repurchase agreement earns a
    rate based on the 90-day Commercial Paper Composite Rate plus 25 basis
    points, set at the beginning of each quarter. Cash equivalents are
    carried at cost, which approximates market value.

    Inventories
        Inventories are stated at the lower of cost (on a weighted average
    basis) or market value and include materials, labor, and manufacturing
    overhead. The components of inventories are as follows:
    (In thousands)                                         1997        1996
    -----------------------------------------------------------------------
    Raw materials and supplies                          $10,379     $ 7,473
    Work in process                                       2,958       1,064
    Finished goods                                       10,568       6,055
                                                        -------     -------
                                                        $23,905     $14,592
                                                        =======     =======

    Property, Plant, and Equipment
        The costs of additions and improvements are capitalized, while
    maintenance and repairs are charged to expense as incurred. The Company
    provides for depreciation and amortization using the straight-line method
    over the estimated useful lives of the property as follows: buildings and
    improvements, 15 to 25 years; machinery and equipment, 2 to 10 years; and
    leasehold improvements, the shorter of the term of the lease or the life
    of the asset. Property, plant, and equipment consists of the following:

    (In thousands)                                         1997        1996
    -----------------------------------------------------------------------
    Land                                                $   285     $   285
    Buildings                                             3,359       2,603
    Machinery, equipment, and leasehold improvements     20,274       9,241
                                                        -------     -------
                                                         23,918      12,129
    Less: Accumulated depreciation and amortization      10,094       6,582
                                                        -------     -------
                                                        $13,824     $ 5,547
                                                        =======     =======
                                        10PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    1.  Nature of Operations and Summary of Significant Accounting Policies
        (continued)

    Other Assets
        Other assets in the accompanying balance sheet primarily represents
    the cost of acquired product technology and capitalized software
    associated with the 1996 acquisition of the Affinity Sensors and
    LabSystems divisions of Fisons and the 1997 acquisition of the Hybaid
    division of LSI (Note 2). These assets are being amortized using the
    straight-line method over their estimated useful lives of 8 years. These
    assets were $2,545,000 and $2,997,000, net of accumulated amortization of
    $557,000 and $295,000, at year-end 1997 and 1996, respectively.

    Cost in Excess of Net Assets of Acquired Companies
        The excess of cost over the fair value of net assets of acquired
    companies is amortized using the straight-line method over 40 years.
    Accumulated amortization was $3,157,000 and $1,010,000 at year-end 1997
    and 1996, respectively. The Company assesses the future useful life of
    this asset whenever events or changes in circumstances indicate that the
    current useful life has diminished. The Company considers the future
    undiscounted cash flows of the acquired companies in assessing the
    recoverability of this asset. If impairment has occurred, any excess of
    carrying value over fair value is recorded as a loss.

    Foreign Currency
        All assets and liabilities of the Company's foreign subsidiaries are
    translated at year-end exchange rates, and revenues and expenses are
    translated at average exchange rates for the year in accordance with SFAS
    No. 52, "Foreign Currency Translation." Resulting translation adjustments
    are reflected as a separate component of shareholders' investment titled
    "Cumulative translation adjustment." Foreign currency transaction gains
    and losses are included in the accompanying statement of operations and
    are not material for the three years presented.

    Forward Contracts
        The Company uses short-term forward foreign exchange contracts to
    manage certain exposures to foreign currencies. The Company enters into
    forward foreign exchange contracts to hedge firm purchase and sale
    commitments denominated in currencies other than its subsidiaries' local
    currencies. These contracts principally hedge transactions denominated in
    U.S. dollars, British pounds sterling, and German deutsche marks. The
    purpose of the Company's foreign currency hedging activities is to
    protect the Company's local currency cash flows related to these
    commitments from fluctuations in foreign exchange rates. Gains and losses
    arising from forward foreign exchange contracts are recognized as offsets
    to gains and losses resulting from the transactions being hedged. The
    Company does not enter into speculative foreign currency agreements.

    Fair Value of Financial Instruments
        The Company's financial instruments consist primarily of cash and
    cash equivalents, accounts receivable, due from parent company and 

                                        11PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    1.  Nature of Operations and Summary of Significant Accounting Policies
        (continued)

    affiliated companies, accounts payable, payable to parent company, a
    subordinated convertible note, and forward foreign exchange contracts.
    The carrying amounts of these financial instruments, with the exception
    of the payable to parent company, subordinated convertible note, and
    forward foreign exchange contracts, approximate fair value due to their
    short-term nature. See Note 6 for fair value information pertaining to
    the Company's payable to parent company and subordinated convertible
    note.
        The Company had forward foreign exchange contracts of $1,543,000 and
    $212,000 outstanding at year-end 1997 and 1996, respectively. The fair
    value of such contracts is the estimated amount that the Company would
    receive upon termination of the contract, taking into account the change
    in foreign exchange rates. The fair value of the Company's forward
    foreign exchange contracts receivable was $3,000 and $11,000 at year-end
    1997 and 1996, respectively.

    Use of Estimates
        The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of assets and liabilities,
    disclosure of contingent assets and liabilities at the date of the
    financial statements, and the reported amounts of revenues and expenses
    during the reporting period. Actual results could differ from those
    estimates.

    Presentation
        Certain amounts in 1996 have been reclassified to conform to the
    presentation in the 1997 financial statements.

    2.  Acquisitions

    1997
        In March 1997, Thermo Instrument acquired approximately 95% of the
    outstanding shares of Life Sciences International PLC (LSI), a London
    Stock Exchange-listed company. Subsequently, Thermo Instrument acquired
    the remaining shares of LSI capital stock. On May 6, 1997, the Company
    agreed to acquire Labsystems OY and Hybaid, which comprised the
    Biosystems Group of LSI, from Thermo Instrument. Labsystems OY, based in
    Finland, manufactures microplate-based immunoassay instruments and
    liquid-handling equipment. Hybaid, based in the U.K., manufactures
    thermal cyclers and consumables for DNA amplification. The aggregate
    purchase price for Labsystems OY and Hybaid is approximately
    $102,451,000, which consists of: a) approximately $91,500,000 for the net
    operating assets of the acquired businesses plus b) $11,000,000 for an
    equivalent amount of cash held by the acquired businesses. The purchase
    price for the net operating assets represents the sum of an estimate of
    the net book value, exclusive of cash, of the businesses as of the date
    that Thermo Instrument acquired LSI, plus a percentage of Thermo
    Instrument's total cost in excess of net assets acquired associated with

                                        12PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    2.  Acquisitions (continued)

    its acquisition of LSI, based on the aggregate 1996 revenues of
    Labsystems OY and Hybaid relative to LSI's 1996 consolidated revenues.
    The Company believes that this allocation methodology is reasonable and
    in accordance with the guidance provided by Staff Accounting Bulletin 55
    (Topic 1:B). The purchase price was subject to a post-closing adjustment
    based on final determination of the net book value, exclusive of cash, of
    the acquired businesses and a final calculation of Thermo Instrument's
    total cost in excess of net assets acquired associated with the
    acquisition of LSI. The Company and Thermo Instrument have finalized the
    post-closing adjustment, which will be a cash refund of approximately
    $5.1 million, expected to be received during the first quarter of 1998.
    Such amount is included in due from parent company and affiliated
    companies in the accompanying 1997 balance sheet.
        Of the $102,451,000 aggregate purchase price, the Company paid
    approximately $35,583,000 in cash to Thermo Instrument in June 1997, has
    debt to Thermo Instrument of $50,000,000, and will issue to Thermo
    Instrument 1,300,000 shares of Company common stock, valued at
    approximately $16,868,000, or $12.98 per share, representing the five-day
    average (April 28, 1997 through May 2, 1997) for the period preceding the
    date the transaction was approved by the Company's and Thermo
    Instrument's respective boards of directors. The Company believes that
    this five-day average is appropriate as it most closely represents the
    value of Company common stock on the date the Company became obligated to
    transfer such shares to Thermo Instrument. The $50,000,000 debt component
    of the purchase price, which bears interest at the 90-day Commercial
    Paper Composite Rate plus 25 basis points, set at the beginning of each
    quarter, is due on July 15, 1999. Issuance of the common stock component
    of the purchase price will occur immediately after the listing upon the
    American Stock Exchange of the 1,300,000 shares of Company common stock
    issuable to Thermo Instrument, which will require approval by the
    Company's shareholders. Because Thermo Instrument is the Company's
    majority shareholder and intends to vote its shares in favor of such
    listing, the approval is assured.
        Because the Company, Labsystems OY, and Hybaid were deemed for
    accounting purposes to be under control of their common majority owner,
    Thermo Instrument, the transaction has been accounted for in a manner
    similar to a pooling of interests. Accordingly, the accompanying 1997
    financial statements include the results of Labsystems OY and Hybaid from
    March 12, 1997, the date these businesses were acquired by Thermo
    Instrument, and the shares issuable subject to shareholder vote have been
    deemed outstanding from that date and are therefore included in the
    computation of earnings per share.
        In July 1997, the Company agreed to acquire Labsystems Japan from
    Thermo Instrument for approximately $5,900,000 in cash. Labsystems Japan
    was acquired by Thermo Instrument as part of its acquisition of LSI. The
    purchase price for Labsystems Japan was determined in a manner similar to
    that for Labsystems OY and Hybaid. Subsequent to the initial
    determination of the purchase price, the Company assumed certain
    additional trade payables totaling approximately $4.4 million, which
    resulted in a corresponding decrease in the purchase price. Of the 

                                        13PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    2.  Acquisitions (continued)

    $4.4 million purchase price adjustment, $0.4 million was received in 1997
    and the remainder is included in due from parent company and affiliated
    companies in the accompanying 1997 balance sheet. The Company expects
    that such adjustment will be received during the first quarter of 1998.
    Labsystems Japan distributes products manufactured by Labsystems OY and
    other LSI companies. The acquisition of Labsystems Japan has been treated
    for accounting purposes in a manner similar to the acquisition of
    Labsystems OY and Hybaid. Accordingly, the accompanying 1997 financial
    statements include the results of Labsystems Japan from March 12, 1997.

    1996
        In February 1996, the Company acquired substantially all of the
    assets, subject to certain liabilities, of the Dynex Technologies
    division of Dynatech Corporation for $43,191,000 in cash. During 1997,
    the Company negotiated a post-closing adjustment in accordance with the
    terms of the purchase agreement, resulting in a refund of $955,000 that
    has been recorded as a reduction to cost in excess of net assets of
    acquired companies. Dynex designs, manufactures, and markets products
    used in the immunoassay segment of the bioinstrumentation market. This
    acquisition has been accounted for using the purchase method of
    accounting, and Dynex's results have been included in the accompanying
    financial statements from the date of acquisition.
        On March 29, 1996, Thermo Instrument acquired a substantial portion
    of the businesses comprising the Scientific Instruments Division of
    Fisons, a wholly owned subsidiary of Rhone-Poulenc Rorer Inc. In July
    1996, the Company acquired from Thermo Instrument two businesses formerly
    part of Fisons, Affinity Sensors and LabSystems, for an aggregate
    purchase price of $9,000,000 in cash. The purchase price for Affinity
    Sensors and LabSystems represents the sum of the net tangible book value
    of those businesses on March 29, 1996, plus a percentage of Thermo
    Instrument's intangible assets associated with its acquisition of the
    Fisons businesses, based on the aggregate 1994 and 1995 revenues of the
    acquired businesses relative to the aggregate 1994 and 1995 revenues of
    the Fisons businesses. The Company believes that this allocation
    methodology is reasonable and in accordance with the guidance provided by
    Staff Accounting Bulletin 55 (Topic 1:B). Affinity Sensors supplies
    biosensors used in life sciences research by the pharmaceutical and
    biotechnology industries, universities, and medical research institutes.
    LabSystems designs, implements, and supports laboratory information
    management systems and chromatography data systems used in research and
    development, quality assurance and control, and processing plants.
    Because the Company, Affinity Sensors and LabSystems were deemed for
    accounting purposes to be under control of their common majority owner,
    Thermo Instrument, the transaction has been accounted for in a manner
    similar to a pooling of interests. Accordingly, the accompanying
    financial statements include the results of Affinity Sensors and
    LabSystems from March 29, 1996, the date these businesses were acquired
    by Thermo Instrument. The acquired assets of Affinity Sensors and
    LabSystems included certain technologies for which technological
    feasibility had not been established at the acquisition date and which 

                                        14PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    2.  Acquisitions (continued)

    had no alternative future use. In connection with the acquisitions, the
    Company wrote off such technology in the amount of $3,500,000, which
    represents the portion of the purchase price allocated to technology in
    development at the acquired businesses, based on estimated replacement
    cost.

        The aggregate cost of Labsystems OY, Hybaid, and Dynex exceeded the
    estimated fair value of the acquired net assets by $103,363,000, which is
    being amortized over 40 years. Allocation of the purchase price for these
    acquisitions was based on estimates of the fair value of the net assets
    acquired.
        Based on unaudited data, the following table presents selected
    financial information for the Company, the Labsystems OY and Hybaid
    divisions of LSI, Dynex, and the Affinity Sensors and LabSystems
    divisions of Fisons on a pro forma basis, assuming that the Company and
    the Labsystems OY and Hybaid divisions of LSI had been combined since the
    beginning of 1996 and assuming the Company, Dynex, and the Affinity
    Sensors and Labsystems divisions of Fisons had been combined since the
    beginning of 1995.

    (In thousands except per share amounts)    1997        1996        1995
    -----------------------------------------------------------------------
    Revenues                               $150,590    $143,396     $80,803
    Net income (loss)                         4,699      (7,759)        822
    Basic and diluted earnings
      (loss) per share                          .42        (.79)        .11

        The pro forma results are not necessarily indicative of future
    operations or the actual results that would have occurred had the
    acquisitions of the Labsystems OY and Hybaid divisions of LSI been made
    at the beginning of 1996, or the acquisitions of Dynex and the Affinity
    Sensors and LabSystems divisions of Fisons been made at the beginning of
    1995.
        In connection with the acquisition of the Labsystems OY and Hybaid
    divisions of LSI, the Company is in the process of restructuring the
    acquired businesses. This restructuring is expected to primarily include
    reductions in staffing levels and, to a lesser extent, costs for
    termination of certain joint venture arrangements. In accordance with the
    requirements of EITF 95-3, as part of the cost of the acquisition, the
    Company has established reserves of approximately $3,720,000, of which
    the Company expended $1,052,000 during 1997, primarily for severance
    payments. Unresolved matters at year-end 1997 included completing planned
    severances and termination of joint ventures. In accordance with EITF
    95-3, finalization of the Company's plan for restructuring the acquired
    businesses will occur within one year from the date of the acquisition.
    Any changes in estimates of these costs prior to such finalization will
    be recorded as adjustments to cost in excess of net assets of acquired
    companies.

                                        15PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    2.  Acquisitions (continued)

        In addition to the restructuring activities described above, during
    1996 the Company had undertaken a restructuring in connection with its
    February 1996 acquisition of Dynex. The restructuring activities
    primarily included reductions of staffing, including manufacturing, sales
    and administrative personnel within the acquired business, and, to a
    lesser extent, abandonment of excess facilities. In connection with these
    restructuring activities, the Company established reserves of $2,259,000
    in 1996. During 1996, the company expended $548,000 for severance and
    $367,000 for other exit costs, including lease payments on abandoned
    facilities. The Company finalized its restructuring plan for Dynex in
    1996. During 1997, the Company expended $556,000 for these matters, which
    primarily represented severance, and reversed its remaining reserve of
    $788,000 with a corresponding decrease to cost in excess of net assets of
    acquired companies.

    3.  Employee Benefit Plans

    Stock-based Compensation Plans

    Stock Option Plans
    ------------------
        The Company has two stock-based compensation plans for its key
    employees, directors, and others, adopted in 1995 and 1997, which permit
    the grant of a variety of stock and stock-based awards as determined by
    the human resources committee of the Company's Board of Directors (the
    Board Committee), including restricted stock, stock options, stock bonus
    shares, or performance-based shares. To date, only nonqualified stock
    options have been granted under these plans. The option recipients and
    the terms of options granted under these plans are determined by the
    Board Committee. Options granted to date are immediately exercisable, but
    are subject to certain transfer restrictions and the right of the Company
    to repurchase shares issued upon exercise of the options at the exercise
    price, upon certain events. The restrictions and repurchase rights
    generally lapse ratably over a five- to ten-year period, depending on the
    term of the option, which generally ranges from seven to twelve years.
    Nonqualified stock options may be granted at any price determined by the
    Board Committee, although incentive stock options must be granted at not
    less than the fair market value of the Company's stock on the date of
    grant. To date, all options have been granted at fair market value. The
    Company also has a directors' stock option plan, adopted in November
    1995, that provides for the grant of stock options to outside directors
    pursuant to a formula approved by the Company's shareholders. Options
    granted under this plan have the same general terms as options granted to
    date under the stock-based compensation plan described above, except that
    the option term is five years and the transfer restrictions and
    repurchase rights generally lapse ratably over a four-year period. In
    addition to the Company's stock-based compensation plans, certain
    officers and key employees may also participate in the stock-based
    compensation plans of Thermo Instrument and Thermo Electron.

                                        16PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    3.  Employee Benefit Plans (continued)

        A summary of the Company's stock option activity is as follows:

                             1997              1996              1995
                       ----------------  ----------------  ----------------
                               Weighted          Weighted          Weighted
                       Number   Average  Number   Average  Number   Average
    (Shares in             of  Exercise      of  Exercise      of  Exercise
    thousands)         Shares     Price  Shares     Price  Shares     Price
    ------------------------------------------------------------------------
    Options outstanding,
      beginning of year   717    $11.27      30    $10.00        -   $    -

        Granted           282     15.71     713     11.28       30    10.00
        Exercised          (2)    10.38       -         -        -        -
        Forfeited         (90)    13.60     (26)    10.00        -        -
                          ---               ---                ---
    Options outstanding,
      end of year         907    $12.42     717    $11.27       30   $10.00
                          ===    ======     ===    ======      ===   ======
    Options exercisable   907    $12.42     717    $11.27        -   $    -
                          ===    ======     ===    ======      ===   ======
    Options available
      for grant           291               183                 70
                          ===               ===                ===

        A summary of the status of the Company's stock options at January 3,
    1998, is as follows:
                                        Options Outstanding and Exercisable
                                        -----------------------------------
                                                                   Weighted
                                                  Weighted Average  Average
                                         Number          Remaining Exercise
    Range of Exercise Prices             Shares   Contractual Life    Price
    ------------------------------------------------------------------------
    (Shares in thousands)
    $10.00 - $11.84                         392          9.4 years   $10.00
     11.85 -  13.69                         270          9.5 years    12.92
     13.70 -  15.53                         214          9.0 years    15.50
     15.54 -  17.38                          31          7.0 years    17.38
                                            ---
    $10.00 - $17.38                         907          9.3 years   $12.42
                                            ===

    Employee Stock Purchase Program
    -------------------------------
        Effective November 1, 1997, substantially all of the Company's
    full-time employees are eligible to participate in an employee stock
    purchase program sponsored by the Company and Thermo Electron, under
    which employees can purchase shares of the Company's and Thermo

                                        17PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    3.  Employee Benefit Plans (continued)

    Electron's common stock. Prior to November 1, 1997, the program was
    sponsored by Thermo Instrument and Thermo Electron. Under this program,
    the applicable shares of common stock can be purchased at the end of a
    12-month period at 95% of the fair market value at the beginning of the
    period, and the shares purchased are subject to a six-month resale
    restriction. Prior to November 1, 1995, the applicable shares of common
    stock could be purchased at 85% of the fair market value at the beginning
    of the period, and the shares purchased were subject to a one-year resale
    restriction. Shares are purchased through payroll deductions of up to 10%
    of each participating employee's gross wages.

    Pro Forma Stock-based Compensation Expense
        In October 1995, the Financial Accounting Standards Board issued SFAS
    No. 123, "Accounting for Stock-based Compensation," which sets forth a
    fair-value based method of recognizing stock-based compensation expense.
    As permitted by SFAS No. 123, the Company has elected to continue to
    apply APB No. 25 to account for its stock-based compensation plans. Had
    compensation cost for awards in 1997, 1996, and 1995 under the Company's
    stock-based compensation plans been determined based on the fair value at
    the grant dates consistent with the method set forth under SFAS No. 123,
    the effect on the Company's net income (loss) and earnings (loss) per
    share would have been as follows:

    (In thousands except per share amounts)   1997        1996         1995
    ------------------------------------------------------------------------
    Net income (loss):
      As reported                           $8,251      $(436)       $2,514
      Pro forma                              7,818       (863)        2,477
    Basic earnings (loss) per share:
      As reported                              .76       (.05)          .33
      Pro forma                                .72       (.10)          .32
    Diluted earnings (loss) per share:
      As reported                              .70       (.05)          .33
      Pro forma                                .67       (.10)          .32

        Pro forma compensation expense for options granted is reflected over
    the vesting period; therefore, future pro forma compensation expense may
    be greater as additional options are granted.
        The weighted average fair value per share of options granted was
    $6.73, $5.36, and $2.93 in 1997, 1996, and 1995, respectively. The fair
    value of each option grant was estimated on the grant date using the
    Black-Scholes option-pricing model with the following weighted-average
    assumptions:

                                                 1997       1996       1995
    ------------------------------------------------------------------------
    Volatility                                    28%        26%        26%
    Risk-free interest rate                      6.4%       6.2%       6.5%
    Expected life of options                6.4 years  8.1 years  3.5 years

                                        18PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    3.  Employee Benefit Plans (continued)

        The Black-Scholes option-pricing model was developed for use in
    estimating the fair value of traded options that have no vesting
    restrictions and are fully transferable. In addition, option-pricing
    models require the input of highly subjective assumptions, including
    expected stock price volatility. Because the Company's employee stock
    options have characteristics significantly different from those of traded
    options, and because changes in the subjective input assumptions can
    materially affect the fair value estimate, in management's opinion, the
    existing models do not necessarily provide a reliable single measure of
    the fair value of its employee stock options.

    401(k) Savings Plan
        Substantially all of the Company's full-time U.S. employees are
    eligible to participate in a 401(k) savings plan. Contributions to the
    401(k) savings plan are made by both the employee and the Company.
    Company contributions are based upon the level of employee contributions.
    For these plans, the Company contributed and charged to expense $397,000,
    $285,000, and $128,000 in 1997, 1996, and 1995, respectively.
    4.  Income Taxes

        The components of income before provision for income taxes are as
    follows:

    (In thousands)                                 1997      1996      1995
    -----------------------------------------------------------------------
    Domestic                                    $12,645   $ 1,786   $ 3,828
    Foreign                                         248      (322)      360
                                                -------   -------   -------
                                                $12,893   $ 1,464   $ 4,188
                                                =======   =======   =======

        The components of the provision for income taxes are as follows:

    (In thousands)                                 1997      1996      1995
    -----------------------------------------------------------------------
    Currently payable:
      Federal                                    $3,589   $   487   $ 1,331
      State                                         530        93       284
      Foreign                                     1,470     1,310       119
                                                 ------   -------   -------
                                                  5,589     1,890     1,734
                                                 ------   -------   -------
    Net deferred (prepaid):
      Federal                                      (380)        8       (50)
      State                                         (81)        2       (10)
      Foreign                                      (486)        -         -
                                                 ------   -------   -------
                                                   (947)       10       (60)
                                                 ------   -------   -------
                                                 $4,642   $ 1,900   $ 1,674
                                                 ======   =======   =======

                                        19PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    4.  Income Taxes (continued)

        The Company receives a tax deduction upon exercise of nonqualified
    stock options by employees for the difference between the exercise price
    and the market price of the underlying common stock on the date of
    exercise. The provision for income taxes that is currently payable does
    not reflect $90,000 and $200,000 of such benefits that have been
    allocated to capital in excess of par value in 1997 and 1996,
    respectively, resulting primarily from employee exercises of stock
    options in affiliated companies.
        The provision for income taxes in the accompanying statement of
    operations differs from the provision calculated by applying the
    statutory federal income tax rate of 34% to income before provision for
    income taxes due to the following:

    (In thousands)                                1997      1996      1995
    ----------------------------------------------------------------------
    Provision for income taxes at
      statutory rate                            $4,384    $  498    $1,424
    Increases (decreases) resulting from:
      State income taxes, net of federal tax       296        63       181
      Net foreign losses not benefited and
        tax rate differential                       11       229        (7)
      Tax benefit of foreign sales corporation     (37)      (23)       (6)
      Write-off of acquired technology (Note 2)      -     1,190         -
      Amortization of cost in excess of net
        assets of acquired companies                 6         6         6
      Other, net                                   (18)      (63)       76
                                                ------    ------    ------
                                                $4,642    $1,900    $1,674
                                                ======    ======    ======

        Prepaid income taxes and deferred income taxes in the accompanying
    balance sheet consist of the following:

    (In thousands)                                 1997       1996
    --------------------------------------------------------------
    Prepaid income taxes:
      Reserves and accruals                      $6,817    $1,872
      Net operating loss                            609         -
      Inventory basis difference                    470       370
      Allowance for doubtful accounts               106        77
                                                 ------    ------
                                                  8,002     2,319
      Less: Valuation allowance                     609         -
                                                 ------    ------
                                                 $7,393    $2,319
                                                 ======    ======
    Deferred income taxes:
      Depreciation                               $  139    $  196
                                                 ======    ======

                                        20PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    4.  Income Taxes (continued)

        At year-end 1997, the Company had foreign net operating loss
    carryforwards of approximately $1,365,000 for which a valuation allowance
    has been established due to uncertainty surrounding their realizability.
    Of this amount, approximately $167,000 expires in 2002 and the remainder
    do not expire.
        A provision has not been made for U.S. or additional foreign taxes on
    $8,400,000 of undistributed earnings of foreign subsidiaries that could
    be subject to taxation if remitted to the U.S. because the Company
    currently plans to keep these amounts permanently reinvested overseas.

    5.  Commitments and Contingency

    Operating Leases
        The Company leases portions of its office and operating facilities
    under various noncancellable operating lease arrangements that expire at
    various dates through 2016. The accompanying statement of operations
    includes expenses from operating leases of $1,949,000, $1,401,000, and
    $69,000 in 1997, 1996, and 1995, respectively. Future minimum payments
    due under noncancellable operating leases as of January 3, 1998, are
    $3,036,000 in 1998; $2,713,000 in 1999; $2,480,000 in 2000; $1,951,000 in
    2001; $1,332,000 in 2002; and $2,586,000 in 2003 and thereafter. Total
    future minimum lease payments are $14,098,000.

    Contingency
        As a result of the acquisition of Affinity Sensors, formerly part of
    the Fisons businesses acquired by Thermo Instrument (Note 2), the Company
    is a defendant in a dispute alleging patent infringement. In general, an
    owner of intellectual property can prevent others from using such
    property and is entitled to damages for unauthorized past usage. The
    Company is vigorously defending this matter, although the Company
    believes that it is entitled to indemnification for any losses on such
    matter by Rhone-Poulenc Rorer under the purchase agreement between Thermo
    Instrument and Rhone-Poulenc Rorer for the initial purchase of the Fisons
    businesses. Accordingly, the Company does not expect that this
    contingency will materially affect its future results of operations or
    financial position.

    6.  Related-party Transactions

    Corporate Services Agreement
        The Company and Thermo Electron have a corporate services agreement
    under which Thermo Electron's corporate staff provides certain
    administrative services, including certain legal advice and services,
    risk management, certain employee benefit administration, tax advice and
    preparation of tax returns, centralized cash management, and certain
    financial and other services, for which the Company paid Thermo Electron
    annually an amount equal to 1.0% of the Company's revenues in 1997 and
    1996 and 1.20% of the Company's revenues in 1995. For these services, the
    Company was charged $1,395,000, $716,000, and $270,000 in 1997, 1996, and
    1995, respectively. Beginning in fiscal 1998, the Company will pay an 

                                        21PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    6.  Related-party Transactions (continued)

    annual fee equal to 0.8% of the Company's revenues. The annual fee is
    reviewed and adjusted annually by mutual agreement of the parties. The
    corporate services agreement is renewed annually but can be terminated
    upon 30 days' prior notice by the Company or upon the Company's
    withdrawal from the Thermo Electron Corporate Charter (the Thermo
    Electron Corporate Charter defines the relationship among Thermo Electron
    and its majority-owned subsidiaries). Management believes that the
    service fee charged by Thermo Electron is reasonable and that such fees
    are representative of the expenses the Company would have incurred on a
    stand-alone basis. For additional items such as employee benefit plans,
    insurance coverage, and other identifiable costs, Thermo Electron charges
    the Company based upon costs attributable to the Company.

    Other Related-party Transactions
        The Company purchases and sells products in the ordinary course of
    business with other companies affiliated with Thermo Electron. Sales of
    such products to affiliated companies totaled $14,034,000, $6,298,000,
    and $1,834,000 in 1997, 1996, and 1995, respectively. Purchases of
    products from affiliated companies totaled $372,000, $539,000, and
    $212,000 in 1997, 1996, and 1995, respectively.
        Prior to 1996, a majority-owned subsidiary of Thermo Instrument acted
    as a commission-based sales agent for certain of the Company's products.
    The Company paid $1,263,000 under this arrangement in 1995.
        In addition, a majority-owned subsidiary of Thermo Instrument
    assembles certain of the Company's products. For these services, the
    Company paid $632,000, $471,000, and $600,000 in 1997, 1996, and 1995,
    respectively.

    Operating Leases
        In addition to the operating leases discussed in Note 5, the Company
    leases certain manufacturing space from ThermoQuest Corporation, a
    majority-owned subsidiary of Thermo Instrument, as a tenant-at-will,
    subject to a six-month cancellation provision. The accompanying statement
    of operations includes expenses from this operating lease of $74,000,
    $105,000, and $105,000 in 1997, 1996, and 1995, respectively. 

    Repurchase Agreement
        The Company invests excess cash in a repurchase agreement with Thermo
    Electron as discussed in Note 1.

    Short- and Long-term Obligations
        In May 1997, the Company agreed to purchase Labsystems OY and Hybaid
    from Thermo Instrument (Note 2). The purchase price for such businesses
    included $50,000,000 of debt, which bears interest at the 90-day
    Commercial Paper Composite Rate plus 25 basis points, set at the
    beginning of each quarter, and which is due on July 15, 1999. The fair
    value of this debt approximates its carrying value due to its variable
    interest rate.

                                        22PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    6.  Related-party Transactions (continued)

        In July 1996, the Company issued to Thermo Instrument a $50,000,000
    principal amount 4.875% subordinated convertible note, due 2001,
    convertible into shares of the Company's common stock at $16.50 per
    share. The fair value of the subordinated convertible note was
    $62,500,000 at year-end 1997, primarily due to the market price of the
    Company's common stock exceeding the conversion price of the note, and
    approximated its carrying value at year-end 1996, primarily due to the
    quoted market price of the Company's common stock and prevailing market
    interest rates.
        In February 1996, the Company borrowed $30,000,000 from Thermo
    Electron pursuant to a promissory note due February 1997 and bearing
    interest at the 90-day Commercial Paper Composite Rate plus 25 basis
    points, set at the beginning of each quarter. This note was repaid in
    July 1996 with proceeds from the $50,000,000 subordinated convertible
    note issued to Thermo Instrument.

    7.  Common Stock

        In September and October 1996, the Company sold 1,670,000 shares of
    its common stock in an initial public offering at $14.00 per share for
    net proceeds of $20,782,000.
        In March 1995, the Company sold 700,000 shares of its common stock in
    a private placement at $10.00 per share for net proceeds of $6,530,000.
    In April 1995, the Company sold 901,500 shares of its common stock in a
    private placement for net proceeds of $8,388,000.
        At January 3, 1998, the Company had reserved 4,303,203 unissued
    shares of its common stock for possible issuance under stock-based
    compensation plans and for issuance upon possible conversion of the
    4.875% subordinated convertible note.

    8.  Geographical Information and Significant Customer

        The following table shows data for the Company by geographical area.

    (In thousands)                               1997       1996        1995
    ------------------------------------------------------------------------
    Revenues:
      United States                          $ 55,474   $ 43,098    $ 17,741
      Finland                                  40,520          -           -
      United Kingdom                           39,927     27,817       4,793
      Other Europe                             24,496     11,228           -
      Asia                                     12,118      3,381           -
      Other                                       897          -           -
      Transfers among geographical areas (a)  (33,978)   (13,875)          -
                                             --------   --------    --------
                                             $139,454   $ 71,649    $ 22,534
                                             ========   ========    ========

                                        23PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    8.  Geographical Information and Significant Customer (continued)

    (In thousands)                               1997       1996        1995
    ------------------------------------------------------------------------
    Income before provision for income taxes:
      United States                          $  8,130   $  3,398    $  3,321
      Finland                                  11,199          -           -
      United Kingdom (b)                       (2,703)    (1,061)        360
      Other Europe                                906        621           -
      Asia                                        136        577           -
      Other                                       212          -           -
      Corporate and eliminations (c)           (2,291)    (1,478)       (312)
                                             --------   --------    --------
      Total operating income                   15,589      2,057       3,369
      Interest income (expense), net           (2,696)      (593)        819
                                             --------   --------    --------
                                             $ 12,893   $  1,464    $  4,188
                                             ========   ========    ========

    Identifiable assets:
      United States                          $ 67,856   $ 47,096    $ 29,022
      Finland                                  73,268          -           -
      United Kingdom                           34,734     27,720       3,885
      Other Europe                             12,824      6,467           -
      Asia                                      3,163      1,149           -
      Other                                       263          -           -
      Corporate (d)                            10,801     40,565           -
                                             --------   --------    --------
                                             $202,909   $122,997    $ 32,907
                                             ========   ========    ========

    Export revenues included in United States
      revenues above (e)                     $  3,282   $  3,432    $  2,741
                                             ========   ========    ========

    (a) Transfers among geographical areas are accounted for at prices that
        are representative of transactions with unaffiliated parties.
    (b) Includes a write-off of acquired technology in 1996 of $3,500,000
        related to the acquisitions of Affinity Sensors and LabSystems.
    (c) Primarily corporate general and administrative expenses.
    (d) Primarily cash and cash equivalents.
    (e) In general, export sales are denominated in U.S. dollars.

        No customer accounted for 10% or more of the Company's total revenues
    in 1997 or 1996. U.S. government agencies accounted for 24% of the
    Company's total revenues in 1995.



                                        24PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    9.  Earnings (Loss) per Share

        Basic and diluted earnings (loss) per share were calculated as
    follows:

    (In thousands except per share amounts)     1997        1996        1995
    ------------------------------------------------------------------------
    Basic
    Net income (loss)                       $  8,251    $   (436)   $  2,514
                                            --------    --------    --------

    Weighted average shares                    9,772       8,542       7,694
    Shares issuable for acquisition of
      Labsystems OY and Hybaid (Note 2)        1,044           -           -
                                            --------    --------    --------
    Weighted average shares, as adjusted      10,816       8,542       7,694
                                            --------    --------    --------
    Basic earnings (loss) per share         $    .76    $   (.05)   $    .33
                                            ========    ========    ========

    Diluted
    Net income (loss)                       $  8,251    $   (436)   $  2,514
    Effect of:
      Convertible note                         1,560           -           -
                                            --------    --------    --------
    Income (loss) available to common
      shareholders, as adjusted             $  9,811    $   (436)   $  2,514
                                            --------    --------    --------

    Basic weighted average shares             10,816       8,542       7,694
    Effect of:
      Convertible note                         3,030           -           -
      Stock options                              105           -           -
                                            --------    --------    --------
    Weighted average shares, as adjusted      13,951       8,542       7,694
                                            --------    --------    --------

    Diluted earnings (loss) per share       $    .70    $   (.05)   $    .33
                                            ========    ========    ========

        The computation of diluted loss per share for 1996 excludes the
    effect of assuming the conversion of the Company's $50,000,000 principal
    amount 4.875% subordinated convertible note because the effect would be
    antidilutive.


                                        25PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                   Notes to Consolidated Financial Statements

    10. Unaudited Quarterly Information

    (In thousands except per share amounts)

    1997                           First(a)  Second       Third      Fourth
    -----------------------------------------------------------------------
    Revenues                     $24,464    $38,399     $35,855     $40,736
    Gross profit                  11,666     19,721      18,727      23,445
    Net income                     1,455      2,098       2,161       2,537
    Earnings per share:
      Basic                          .15        .19         .20         .23
      Diluted                        .14        .18         .18         .21


    1996                           First(b)  Second       Third      Fourth
    -----------------------------------------------------------------------
    Revenues                     $10,911    $18,871     $19,346     $22,521
    Gross profit                   4,195      9,481       9,573      10,593
    Net income (loss)             (3,114)       431         787       1,460
    Earnings (loss) per share:
      Basic                         (.38)       .05         .10         .15
      Diluted                       (.38)       .05         .09         .14

    (a) Reflects the acquisitions of Labsystems OY, Hybaid, and Labsystems
        Japan, effective March 1997, including the effect of treating as
        outstanding from March 1997 the 1,300,000 shares issuable to Thermo
        Instrument as part of the purchase price for Labsystems OY and
        Hybaid.
    (b) Reflects the acquisition of Dynex in February 1996, and the
        acquisition of Affinity Sensors and LabSystems, effective March 1996,
        including the associated write-off of $3,500,000 of acquired
        technology.



                                        26PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                    Report of Independent Public Accountants

    To the Shareholders and Board of Directors
    of Thermo BioAnalysis Corporation:

        We have audited the accompanying consolidated balance sheet of Thermo
    BioAnalysis Corporation (a Delaware corporation and 70%-owned subsidiary
    of Thermo Instrument Systems Inc.) and subsidiaries as of January 3,
    1998, and December 28, 1996, and the related consolidated statements of
    operations, cash flows, and shareholders' investment for each of the
    three years in the period ended January 3, 1998. These consolidated
    financial statements are the responsibility of the Company's management.
    Our responsibility is to express an opinion on these consolidated
    financial statements based on our audits.
        We conducted our audits in accordance with generally accepted
    auditing standards. Those standards require that we plan and perform the
    audit to obtain reasonable assurance about whether the consolidated
    financial statements are free of material misstatement. An audit includes
    examining, on a test basis, evidence supporting the amounts and
    disclosures in the financial statements. An audit also includes assessing
    the accounting principles used and significant estimates made by
    management, as well as evaluating the overall financial statement
    presentation. We believe that our audits provide a reasonable basis for
    our opinion.
        In our opinion, the consolidated financial statements referred to
    above present fairly, in all material respects, the financial position of
    Thermo BioAnalysis Corporation and subsidiaries as of January 3, 1998,
    and December 28, 1996, and the results of their operations and their cash
    flows for each of the three years in the period ended January 3, 1998, in
    conformity with generally accepted accounting principles.



                                                  Arthur Andersen LLP



    Boston, Massachusetts
    February 17, 1998


                                        27PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

        Forward-looking statements, within the meaning of Section 21E of the
    Securities Exchange Act of 1934, are made throughout this Management's
    Discussion and Analysis of Financial Condition and Results of Operations.
    For this purpose, any statements contained herein that are not statements
    of historical fact may be deemed to be forward-looking statements.
    Without limiting the foregoing, the words "believes," "anticipates,"
    "plans," "expects," "seeks," "estimates," and similar expressions are
    intended to identify forward-looking statements. There are a number of
    important factors that could cause the results of the Company to differ
    materially from those indicated by such forward-looking statements,
    including those detailed immediately after this Management's Discussion
    and Analysis of Financial Conditions and Results of Operations under the
    heading "Forward-looking Statements."

    Overview

        The Company has three principal product lines: life sciences
    instrumentation, consumables, and information management systems. The
    Company's life sciences instrumentation and consumables are based on
    proprietary immunoassay, optical biosensor, polymerase chain reaction
    (PCR), liquid-handling, mass spectrometry, capillary electrophoresis
    (CE), and radiation detection technologies. The Company's information
    management systems subsidiary designs, implements, and supports
    laboratory information management systems (LIMS) and chromatography data
    systems.
        The Company's strategy is to develop and market a portfolio of
    instruments, consumables, and information management systems for
    biochemistry and other applications through the acquisition of
    complementary businesses and technologies and through research and
    development of innovative products. The Company was incorporated in
    February 1995. Since then, it acquired Dynex in February 1996, acquired
    Affinity Sensors and LabSystems, effective March 29, 1996, and agreed to
    acquire Labsystems OY, Hybaid, and Labsystems Japan, effective March 12,
    1997 (Note 2).
        Approximately 63%, 45%, and 33% of the Company's revenues in 1997,
    1996, and 1995, respectively, were derived from sales of products and
    services outside the U.S., through export sales and sales by the
    Company's foreign operations. During 1997, the Company's sales to Asia
    were approximately 16% of total revenues, primarily to Japan, China, and
    Singapore. Asia is experiencing a severe economic crisis, which has been
    characterized by sharply reduced economic activity and liquidity, highly
    volatile foreign-currency-exchange and interest rates, and unstable stock
    markets. The Company's sales to Asia could be adversely affected by the
    unstable economic conditions in Asia. 
        The Company anticipates that a significant portion of its revenues
    will be from sales to customers outside the U.S. As a result, the
    Company's financial performance and competitive position can be affected
    by currency exchange rate fluctuations. The Company may use forward
    contracts to reduce its exposure to currency fluctuations.

                                        28PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

    Results of Operations

    1997 Compared With 1996
        Revenues increased to $139.5 million in 1997 from $71.6 million in
    1996. Revenues increased $69.5 million due to acquisitions. In addition,
    revenues at the Company's LIMS and CE businesses increased $3.1 million
    primarily due to new-product introductions and sales generated at four
    direct sales and service offices established in the second quarter of
    1997. These increases were offset in part by a decrease in revenues at
    the Company's health physics instrumentation division, due to weakness in
    U.S. Department of Energy and nuclear power plant spending, and, to a
    lesser extent, a $1.2 million decrease due to the unfavorable effects of
    currency translation as a result of the strengthening of the U.S. dollar
    relative to foreign currencies in countries in which the Company
    operates. 
        The gross profit margin increased to 53% in 1997 from 47% in 1996,
    primarily due to the inclusion of higher-margin revenues from the
    recently acquired liquid-handling business and, to a lesser extent, the
    inclusion of higher-margin revenues from the Company's LIMS business,
    acquired effective March 29, 1996, for the full year in 1997. These
    increases were offset in part by the inclusion of lower-margin revenues
    from the recently acquired PCR business.
        Selling, general, and administrative expenses as a percentage of
    revenues increased to 33% in 1997 from 29% in 1996. The increase was
    primarily due to the impact of higher costs at the recently acquired
    liquid-handling and PCR businesses, as well as an increase in costs in
    the LIMS business as a result of the opening of four direct sales and
    service offices in the second quarter of 1997. In addition, the Company
    incurred $0.7 million of severance and related costs related to
    reductions in personnel in 1997. Research and development expenses
    increased to $11.7 million in 1997 from $7.3 million in 1996, primarily
    due to acquisitions.
        During 1996, the Company wrote off $3.5 million of acquired
    technology in connection with the acquisitions of the U.K.-based LIMS and
    optical biosensor businesses (Note 2).
        Interest income increased to $2.0 million in 1997 from $1.3 million
    in 1996, primarily due to interest income earned on invested proceeds
    from the Company's initial public offering of common stock in September
    and October 1996. Interest expense, related party, increased to
    $4.7 million in 1997 from $1.9 million in 1996, primarily due to interest
    expense on the $50.0 million debt payable to Thermo Instrument associated
    with the acquisition of Labsystems OY and Hybaid and the inclusion of a
    full year of interest for the $50.0 million principal amount subordinated
    convertible note issued to Thermo Instrument in July 1996, offset in part
    by the effect of the repayment in July 1996 of a $30.0 million promissory
    note issued to Thermo Electron in February 1996.
        The effective tax rate was 36% in 1997, compared with 38% in 1996,
    excluding the effect of the 1996 write-off of acquired technology
    associated with the acquisitions of the Company's U.K.-based LIMS and
    optical biosensor businesses, for which no tax benefit was recorded.
    These rates exceeded the statutory federal income tax rate primarily due

                                        29PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

    1997 Compared With 1996 (continued)
    to the impact of state income taxes. The effective tax rate decreased in
    1997, primarily due to income from certain newly acquired foreign
    businesses, which are subject to lower tax rates.
        The Company is currently assessing the potential impact of the year
    2000 on the processing of date-sensitive information by the Company's
    computerized information systems and on products sold as well as products
    purchased by the Company. The Company believes that its internal
    information systems and current products are either year 2000 compliant
    or will be so prior to the year 2000 without incurring material costs.
    There can be no assurance, however, that the Company will not experience
    unexpected costs and delays in achieving year 2000 compliance for its
    internal information systems and current products, which could result in
    a material adverse effect on the Company's future results of operations.
        The Company is presently assessing the effect that the year 2000
    problem may have on its previously sold products. The Company is also
    assessing whether its key suppliers are adequately addressing this issue
    and the effect this might have on the Company. The Company has not
    completed its analysis and is unable to conclude at this time that the
    year 2000 problem as it relates to its previously sold products and
    products purchased from key suppliers is not reasonably likely to have a
    material adverse effect on the Company's future results of operations.

    1996 Compared With 1995
        Revenues increased to $71.6 million in 1996 from $22.5 million in
    1995. An increase in revenues of $52.3 million due to acquisitions was
    offset in part by lower revenues at the Company's MALDI-TOF subsidiary
    due to increased competition and a change in distribution channels from
    commission-based sales agents to distributors. In addition, the Company
    believes that revenues at its health physics instrumentation division
    decreased primarily due to reduced spending at U.S. Department of Energy
    facilities as a result of the federal budgetary impasse.
        The gross profit margin increased to 47% in 1996 from 42% in 1995,
    primarily due to the inclusion of higher-margin revenues at the Company's
    LIMS and optical biosensor businesses and, to a lesser extent, at the
    Company's immunoassay business. These increases were offset in part by a
    decrease in margins at the Company's MALDI-TOF subsidiary, due to a
    change in distribution channels from commission-based sales agents to
    distributors, which resulted in reduced revenues.
        Selling, general, and administrative expenses as a percentage of
    revenues increased to 29% in 1996 from 21% in 1995, primarily due to
    higher costs as a percentage of revenues at the Company's recently
    acquired immunoassay business and, to a lesser extent, at the LIMS
    business. In mid-1996 the Company implemented a cost reduction plan at
    the immunoassay business, which is intended to reduce selling, general,
    and administrative expenses as a percentage of revenues primarily by
    decreasing staffing levels and, to a lesser extent, travel and other
    related costs. Research and development expenses increased to $7.3
    million in 1996 from $1.3 million in 1995, primarily due to the inclusion
    of expenses at acquired businesses.


                                        30
PAGE
<PAGE>



    Thermo BioAnalysis Corporation                  1997 Financial Statements

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

    1996 Compared With 1995 (continued)
        During 1996, the Company wrote off $3.5 million of acquired
    technology in connection with the acquisitions of the U.K.-based LIMS and
    optical biosensor businesses (Note 2). 
        Interest income in both periods primarily represents interest earned
    on invested proceeds from the Company's private placements of common
    stock in March and April 1995, and initial public offering of common
    stock in September and October 1996. Interest expense, related party, in
    1996 represents interest associated with a $50.0 million principal amount
    subordinated convertible note issued to Thermo Instrument in July 1996
    and, to a lesser extent, interest associated with a $30.0 million
    promissory note issued to Thermo Electron in February 1996, which was
    repaid in July 1996.
        The effective tax rate was 38% and 40% in 1996 and 1995,
    respectively, excluding the effect of the 1996 write-off of acquired
    technology associated with the acquisitions of the U.K.-based LIMS and
    optical biosensor businesses, for which no tax benefit has been recorded.
    These rates exceeded the statutory federal income tax rate primarily due
    to losses at foreign businesses for which no benefit could be recognized
    and the impact of state income taxes. The effective tax rate decreased in
    1996 primarily due to income from certain newly acquired foreign
    companies, which are subject to lower tax rates.

    Liquidity and Capital Resources

        Consolidated working capital was $55.9 million as of January 3, 1998,
    compared with $59.8 million as of December 28, 1996. Included in working
    capital are cash and cash equivalents of $19.8 million as of January 3,
    1998, compared with $45.5 million as of December 28, 1996. Of the
    Company's total cash and cash equivalents at January 3, 1998, $10.2
    million was invested in a repurchase agreement with Thermo Electron (Note
    1). During 1997, $8.1 million of cash was provided by operating
    activities. An increase in accounts receivable used $6.9 million in cash,
    primarily as a result of an increase in shipments near the end of the
    year.
        Investing activities used $31.1 million in cash during 1997. In May
    1997, the Company agreed to acquire Labsystems OY and Hybaid, which
    comprised the Biosystems Group of LSI, from Thermo Instrument for
    approximately $102.5 million, which consists of: a) approximately $91.5
    million for the net operating assets of the acquired businesses plus b)
    $11.0 million for an equivalent amount of cash held by the acquired
    businesses. Of the $102.5 million aggregate purchase price, the Company
    paid $35.6 million in cash to Thermo Instrument in June 1997, has debt to
    Thermo Instrument of $50.0 million, and will issue to Thermo Instrument
    1,300,000 shares of Company common stock valued at $16.9 million at the
    time of the May 1997 agreement to acquire Labsystems OY and Hybaid (Note
    2). The $50.0 million debt component of the purchase price, which bears
    interest at the 90-day Commercial Paper Composite Rate plus 25 basis
    points, set at the beginning of each quarter, is due on July 15, 1999.
    The Company expects to receive a refund from Thermo Instrument of
    approximately $5.1 million relating to the purchase price for the

                                        31
PAGE
<PAGE>



    Thermo BioAnalysis Corporation                  1997 Financial Statements

                     Management's Discussion and Analysis of  
                  Financial Condition and Results of Operations

    Liquidity and Capital Resources (continued)

    Biosystems Group, based on Thermo Instrument's final determination of the
    book value of the acquired net assets as well as its final determination
    of the cost in excess of net assets acquired. The Company expects that
    such refund will be received during the first quarter of 1998. In July
    1997, the Company agreed to acquire Labsystems Japan for approximately
    $5.9 million in cash. The Company expects to receive an adjustment of
    approximately $4.0 million during the first quarter of 1998 relating to
    the purchase price of Labsystems Japan (Note 2). The Company expended
    $3.1 million for purchases of property, plant, and equipment during 1997,
    and expects to make additional capital expenditures of approximately $5
    million during 1998.
        The Company has undertaken a restructuring of certain acquired
    businesses (Note 2). Amounts accrued for such activities total $2.7
    million at January 3, 1998. The payments will primarily occur during
    1998. The Company expects that such expenditures will not change
    materially from amounts accrued at January 3, 1998.
        The Company is considering acquiring the Clinical Products Group of
    LSI from Thermo Instrument. It is anticipated that the acquisition would
    be effected through the issuance of shares of Company common stock and/or
    cash. The purchase price, including the number of shares to be issued, if
    any, is currently under consideration. The transaction would be subject
    to several conditions, including determination of the purchase price,
    completion of due diligence, negotiation of a definitive agreement, and
    approval by the respective boards of directors of the Company and Thermo
    Instrument.
        Although the Company expects to have positive cash flow from its
    existing operations, the Company anticipates it will require significant
    amounts of cash for the possible acquisition of complementary businesses
    and technologies. The Company expects that it will finance these
    acquisitions, including the potential acquisition described above,
    through a combination of internal funds, additional debt or equity
    financing, and/or short-term borrowings from Thermo Instrument or Thermo
    Electron, although there is no agreement with these companies to ensure
    that funds will be available on acceptable terms or at all. The Company
    has $50.0 million of debt to Thermo Instrument, due in July 1999, which
    it expects to pay through a combination of internal funds and additional
    debt or equity financing, although Thermo Instrument has agreed to
    require repayment only to the extent that the Company's resources permit.
    Accordingly, the Company believes that its existing cash and cash
    equivalents are sufficient to meet the capital requirements of its
    existing businesses for the foreseeable future.




                                        32PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Forward-looking Statements

        In connection with the "safe harbor" provisions of the Private
    Securities Litigation Reform Act of 1995, the Company wishes to caution
    readers that the following important factors, among others, in some cases
    have affected, and in the future could affect, the Company's actual
    results and could cause its actual results in 1998 and beyond to differ
    materially from those expressed in any forward-looking statements made
    by, or on behalf of, the Company.

        Intense Competition. The Company encounters and expects to continue
    to encounter intense competition in the sale of its products. The Company
    believes that the principal competitive factors affecting the markets for
    its products include product features, product performance, price, and
    service. The Company's competitors include a number of large
    multinational corporations. These companies and certain of the Company's
    other competitors have substantially greater financial, marketing, and
    other resources than the Company. As a result, they may be able to adapt
    more quickly to new or emerging technologies and changes in customer
    requirements, or to devote greater resources to the promotion and sale of
    their products than the Company. Competition could increase if new
    companies enter the market or if existing competitors expand their
    product lines or intensify efforts within existing product lines. There
    can be no assurance that the Company's current products, products under
    development or ability to develop new technologies will be sufficient to
    enable it to compete effectively.

        Rapid and Significant Technological Change and New Products. The
    markets for the Company's products are characterized by rapid and
    significant technological change, evolving industry standards, and
    frequent new product introductions and enhancements. Many of the
    Company's products and products under development are technologically
    innovative, and require significant planning, design, development, and
    testing, at the technological, product, and manufacturing process levels.
    These activities require significant capital commitments and investment
    by the Company. In addition, products that are competitive in the
    Company's markets are characterized by rapid and significant
    technological change due to industry standards that may change on short
    notice and by the introduction of new products and technologies that
    render existing products and technologies uncompetitive or obsolete.
    There can be no assurance that any of the products currently being
    developed by the Company, or those to be developed in the future, will be
    technologically feasible or accepted by the marketplace, that any such
    development will be completed in any particular time frame, or that the
    Company's products or proprietary technologies will not become
    uncompetitive or obsolete.

        Uncertainty of Market Acceptance of New Products. Certain of the
    Company's products represent alternatives to traditional instruments and
    methods and as a result may be slow to achieve, or may not achieve,
    market acceptance, as customers may seek further validation of the
    efficiency and efficacy of the Company's technology. This is particularly
    true where the purchase of the product requires a significant capital
    commitment. The Company's optical biosensor, MALDI-TOF, and capillary

                                        33PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Forward-looking Statements

    electrophoresis products are based on relatively new technologies. The
    Company believes that, to a significant extent, its growth prospects
    depend on its ability to gain acceptance by a broader group of customers
    of the efficiency and efficacy of the Company's innovative technologies.
    There can be no assurance that the Company will be successful in
    obtaining such broad acceptance.

        Dependence on Capital Spending Policies and Government Funding. The
    Company's customers include pharmaceutical, biotechnology, and chemical
    companies, and clinical diagnostic laboratories and companies. The
    capital spending policies of these companies can have a significant
    effect on the demand for the Company's products. Such policies are based
    on a wide variety of factors, including the resources available to make
    such purchases, the spending priorities among various types of research
    equipment, and the policies regarding capital expenditures during
    recessionary periods. Any decrease in capital spending by life sciences
    companies could have a material adverse effect on the Company's business
    and results of operations. Recently, biotechnology companies have raised
    significant amounts of capital through public share offerings, and most
    of these companies are engaged in active research and development
    programs that include capital spending. However, the availability of
    capital through the public markets can be cyclical and there can be no
    assurance that the raising of capital by these companies will continue,
    nor can there be any assurance that additional capital, if available,
    will result in increased sales of the Company's products.
        A significant portion of the Company's sales are to universities,
    government research laboratories, private foundations, and other
    institutions where funding is dependent on grants from government
    agencies such as the National Institutes of Health (NIH) and the
    equivalent of the NIH in foreign countries where the Company markets its
    products. If government funding necessary to purchase the Company's
    products were to become unavailable to researchers for any extended
    period of time, or if overall research funding were to decrease, the
    Company's business and results of operations could be adversely affected.
    In addition, a significant portion of sales by the Company's Eberline
    health physics subsidiary were made to various branches of the United
    States government, primarily the United States Department of Energy.
    Revenues attributable to sales to the Departments of Defense and Energy
    declined in 1996 compared to 1995. Any further decline in purchases by
    the United States government, including, without limitation, declines as
    the result of budgeting limitations, could have an adverse effect on the
    Company's business and results of operations.

        Dependence on Patents and Proprietary Rights. The Company places
    considerable importance on obtaining patent and trade secret protection
    for significant new technologies, products, and processes because of the
    length of time and expense associated with bringing new products through
    the development process and to the marketplace. The Company's success
    depends, in part, on its ability to develop patentable products and
    obtain and enforce patent protection for its products both in the United
    States and in other countries. The Company has filed and intends to file
    applications as appropriate for patents covering its products. No

                                        34PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Forward-looking Statements

    assurance can be given that patents will issue from any pending or future
    patent applications owned by or licensed to the Company, or that the
    claims allowed under any issued patents will be sufficiently broad to
    protect the Company's technology. In addition, no assurance can be given
    that any issued patents owned by or licensed to the Company will not be
    challenged, invalidated, or circumvented, or that the rights granted
    thereunder will provide competitive advantages to the Company. The
    Company could incur substantial costs in defending itself in suits
    brought against it or in suits in which the Company may assert its patent
    rights against others. If the outcome of any such litigation is
    unfavorable to the Company, the Company's business and results of
    operations could be materially adversely affected.
        The commercial success of the Company will also depend in part on its
    neither infringing patents issued to competitors or others, nor breaching
    the technology licenses upon which components of the Company's products
    are based. The Company is aware of patents and patent applications
    belonging to competitors and other third parties, and it is uncertain
    whether these patents and patent applications will require the Company to
    alter its products or processes, pay licensing fees, or cease making and
    selling infringing products and pay damages for past infringement. In
    particular, the Company has been named as a defendant in a patent
    infringement lawsuit brought by Biacore AB and Biacore, Inc.
    (Biacore). The complaint alleges that the design of the cuvette used in
    the Company's optical biosensor system infringes a patent held by
    Biacore. The Company is also aware of patents held by another third party
    that may relate to the features of certain of the Company's MALDI-TOF
    mass spectrometers. The Company believes that revenues from products
    which allegedly used or related to features associated with these patents
    represented approximately 2.2% of the Company's total revenues in 1997;
    however, if Biacore were successful in enforcing any such patent, the
    Company believes that it is entitled to indemnification for losses in
    this matter by Rhone-Poulenc Rorer under the purchase agreement between
    Thermo Instrument and Rhone-Poulenc Rorer for the initial purchase of the
    Fisons businesses. In general, the holder of a patent who is successful
    in proving infringement by the Company would subject the Company to
    damages for past infringement and would enjoin the Company from
    manufacturing and selling products utilizing the features associated with
    such patent, which could have a material adverse effect on the Company's
    business and results of operations.
        The Company relies on trade secrets and proprietary know-how which it
    seeks to protect, in part, by confidentiality agreements with its
    collaborators, employees, and consultants. There can be no assurance that
    these agreements will not be breached, that the Company would have
    adequate remedies for any breach, or that the Company's trade secrets
    will not otherwise become known or be independently developed by
    competitors. 

        Government Regulations; No Assurance of Regulatory Approval. The
    production and marketing of certain of the Company's products and its
    ongoing research and development activities are subject to regulation by
    government authorities in the United States and in other countries. To
    the extent that an analytical instrument will be used in human clinical

                                        35PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Forward-looking Statements

    or diagnostic applications, the manufacturer of that instrument must
    submit to the U.S. Food and Drug Administration (FDA), prior to
    commercial distribution of the instrument in the U.S., either a premarket
    notification (510(k)) or a premarket approval (PMA) application. The FDA
    uses a risk-based system to classify medical devices. Lower risk devices,
    in Class I and Class II, are generally subject to 510(k) premarket
    notification, in which the FDA determines that a device is safe and
    effective based on its "substantial equivalence" to a legally marketed
    product. Highest risk, Class III devices are subject to the premarket
    approval process, in which the FDA generally determines the safety and
    effectiveness of the device based on the submission of clinical data. The
    Company has, to date, been required to obtain 510(k) clearance with
    respect to certain clinical applications of its Microtiter(R) technology
    products, which are classified as Class I products. There can be no
    assurance that 510(k) clearance for any future product or modification of
    an existing product will be granted by the FDA within a reasonable time
    frame, if at all, that in the future the FDA will not require
    manufacturers of certain medical devices to engage in a more thorough and
    time consuming approval process than the 510(k) process, or that the FDA
    or certain corresponding state or international government agencies will
    permit marketing of the Company's products in their respective
    jurisdictions.
        As a result of the clinical applications of certain of the Company's
    Microtiter technology products, the Company is registered with the FDA as
    a medical device manufacturer. As such, the Company may be inspected on a
    routine basis by the FDA for compliance with the FDA's Good Manufacturing
    Practices and other applicable regulations. These regulations require
    that the Company manufacture its products and maintain related
    documentation in a prescribed manner with respect to manufacturing,
    testing, and quality control activities. Further, the Company is required
    to comply with various FDA requirements for reporting of product
    malfunctions and other matters.
        The regulatory standards for manufacturing are currently being
    applied stringently by the FDA and state regulatory agencies.
    Noncompliance with FDA or applicable state agency regulations, or
    discovery of previously unknown problems with a product, manufacturer, or
    facility may result in restrictions on such product or manufacturer,
    including fines, recalls, injunctions or seizures of products, refusal of
    the government to approve or clear product approval applications or to
    allow the Company to enter into government supply contracts, or even
    withdrawal of the product from the market, or criminal prosecution, any
    of which could have a material adverse effect on the Company's business
    and results of operations.
        International regulatory bodies often establish varying regulations
    governing product standards, packaging requirements, labeling
    requirements, import restrictions, tariff regulations, duties, and tax
    requirements. In order to continue to sell its products in Europe, the
    Company is required to maintain an ISO 9000 series registration, an
    internationally-recognized set of quality standards, and each of its
    products is required to obtain a CE Mark, evidence of compliance with
    European Union electronic safety requirements. Although the Company has
    an active program to comply with CE Mark requirements and an ISO 9000

                                        36PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Forward-looking Statements

    compliance program, there can be no assurance that the Company will be
    successful in maintaining its compliance with applicable certification
    requirements. Any violation of, and the cost of compliance with, these
    regulations or requirements could have a material adverse effect on the
    Company's business and results of operations.

        Uncertainty of Patient Reimbursement. The Federal government
    regulates reimbursement of fees for certain diagnostic examinations and
    capital equipment acquisition costs connected with services to Medicare
    beneficiaries. Recent legislation has limited Medicare reimbursement for
    diagnostic examinations. For example, deficit reduction measures have
    resulted in reimbursement rate reductions in the past and may result in
    further rate reductions in the future. According to third-party data,
    overall Medicare reimbursements were estimated to decline approximately
    2.3% in 1996 from 1995. These policies may have the effect of limiting
    the availability or reimbursement for procedures, and as a result may
    inhibit or reduce demand by healthcare providers for products in the
    markets in which the Company competes. Although the Company cannot
    predict what effect the policies of government entities and other
    third-party payors will have on future sales of the Company's products,
    there can be no assurance that such policies would not have an adverse
    impact on the operations of the Company.

        Potential Product Liability. The Company's business exposes it to
    potential product liability claims which are inherent in the
    manufacturing, marketing, and sale of biomedical instruments and
    diagnostic products, and as such the Company may face substantial
    liability to patients for damages resulting from the faulty design or
    manufacture of its products. The Company currently maintains product
    liability insurance, but there can be no assurance that this insurance
    will provide sufficient coverage in the event of a claim, that the
    Company will be able to maintain such coverage on acceptable terms, if at
    all, or that a product liability claim would not materially adversely
    affect the business or financial condition of the Company.

        Risks Associated with Acquisition Strategy. The Company's strategy
    includes the acquisition of businesses and technologies that complement
    or augment the Company's existing product lines. Promising acquisitions
    are difficult to identify and complete for a number of reasons, including
    competition among prospective buyers and the need for regulatory
    approvals, including antitrust approvals. Any acquisitions completed by
    the Company may be made at substantial premiums over the fair value of
    the net assets of the acquired companies. There can be no assurance that
    the Company will be able to complete future acquisitions or that the
    Company will be able to successfully integrate any acquired businesses.
    In order to finance such acquisitions, it may be necessary for the
    Company to raise additional funds through public or private financings.
    Any equity or debt financing, if available at all, may be on terms which
    are not favorable to the Company and, in the case of equity financing,
    may result in dilution to the Company's shareholders.

                                        37PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements

                           Forward-looking Statements

        Risks Associated With International Operations. International sales
    accounted for 63% of the Company's total revenues in 1997. The Company
    intends to continue to expand its presence in international markets.
    International revenues are subject to a number of risks, including the
    following: agreements may be difficult to enforce and receivables
    difficult to collect through a foreign country's legal system; foreign
    customers may have longer payment cycles; foreign countries may impose
    additional withholding taxes or otherwise tax the Company's foreign
    income, impose tariffs, or adopt other restrictions on foreign trade;
    fluctuations in exchange rates may affect product demand and adversely
    affect the profitability in U.S. dollars of products and services
    provided by the Company in foreign markets where payment for the
    Company's products and services is made in the local currency; U.S.
    export licenses may be difficult to obtain; and the protection of
    intellectual property in foreign countries may be more difficult to
    enforce. There can be no assurance that any of these factors will not
    have a material adverse impact on the Company's business and results of
    operations. A portion of the Company's revenues is derived from sales in
    Asia. Asia is experiencing a severe economic crisis, which has been
    characterized by sharply reduced economic activity and liquidity, highly
    volatile foreign-currency-exchange and interest rates, and unstable stock
    markets. The Company's sales to Asia could be adversely affected by the
    unstable economic conditions there.

        Potential Impact of Year 2000 on Processing Date-sensitive
    Information. The Company is currently assessing the potential impact of
    the year 2000 on the processing of date-sensitive information by the
    Company's computerized information systems and on products sold as well
    as products purchased by the Company. The Company believes that its
    internal information systems and current products are either year 2000
    compliant or will be so prior to the year 2000 without incurring material
    costs. There can be no assurance, however, that the Company will not
    experience unexpected costs and delays in achieving year 2000 compliance
    for its internal information systems and current products, which could
    result in a material adverse effect on the Company's future results of
    operations.
        The Company is presently assessing the effect that the year 2000
    problem may have on its previously sold products. The Company is also
    assessing whether its key suppliers are adequately addressing this issue
    and the effect this might have on the Company. The Company has not
    completed its analysis and is unable to conclude at this time that the
    year 2000 problem as it relates to its previously sold products and
    products purchased from key suppliers is not reasonably likely to have a
    material adverse effect on the Company's future results of operations.

                                        38PAGE
<PAGE>

    Thermo BioAnalysis Corporation                  1997 Financial Statements

                         Selected Financial Information

    (In thousands except
    per share amounts)        1997(a)   1996(b)   1995(c)   1994      1993
    -----------------------------------------------------------------------
    Statement of
      Operations Data:
    Revenues              $139,454  $ 71,649  $ 22,534  $ 25,127  $ 24,479
    Net income (loss)        8,251      (436)    2,514     2,400     2,538
    Earnings (loss)
      per share:
        Basic                  .76      (.05)      .33       .37       .39
        Diluted                .70      (.05)      .33       .37       .39

    Balance Sheet Data:
    Working capital       $ 55,896  $ 59,750  $ 27,105  $  8,282  $  6,333
    Total assets           202,909   122,997    32,907    14,349    13,596
    Long-term obligations  100,204    50,000         -         -         -
    Shareholders'
      investment            67,852    51,316    29,146    10,162     8,332

    (a) Reflects the acquisitions of Labsystems OY, Hybaid, and Labsystems
        Japan effective March 1997, including the effect of treating as
        outstanding from March 1997 the 1,300,000 shares issuable to Thermo
        Instrument as part of the purchase price for Labsystems OY and
        Hybaid.
    (b) Reflects the net proceeds of the Company's initial public offering of
        common stock in September and October 1996, the acquisition of Dynex
        in February 1996, and the acquisition of Affinity Sensors and
        LabSystems effective March 1996, including the associated write-off
        of $3,500,000 of acquired technology.
    (c) Reflects the net proceeds of the Company's private placements of
        common stock in March 1995 and April 1995.





                                        39PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements


    Common Stock Market Information
        The Company's common stock is traded on the American Stock Exchange
    under the symbol TBA. The following table sets forth the high and low
    sale prices of the Company's common stock since September 18, 1996, the
    date the Company's common stock began trading on that exchange, as
    reported in the consolidated transaction reporting system.

                                          1997                 1996
                                   ------------------   ------------------
    Quarter                            High       Low      High       Low
    ----------------------------------------------------------------------
    First                           $14 1/8   $ 9 3/4   $     -   $     -
    Second                           16 1/8     9             -         -
    Third                            18 1/4    14 1/2    14        13 1/8
    Fourth                           20        16 5/8    14 5/8    12 1/2

        As of January 30, 1998, the Company had 86 holders of record of its
    common stock. This does not include holdings in street or nominee names.
    The closing market price on the American Stock Exchange for the Company's
    common stock on January 30, 1998, was $17 1/2 per share.

    Shareholder Services
        Shareholders of Thermo BioAnalysis Corporation who desire information
    about the Company are invited to contact John N. Hatsopoulos, Chief
    Financial Officer, Thermo BioAnalysis Corporation, 81 Wyman Street, P.O.
    Box 9046, Waltham, Massachusetts 02254-9046, (781) 622-1111. A mailing
    list is maintained to enable shareholders whose stock is held in street
    name, and other interested individuals, to receive quarterly reports,
    annual reports, and press releases as quickly as possible. Distribution
    of printed quarterly reports is limited to the second quarter only. All
    material will be available through Thermo Electron's Internet site
    (http://www.thermo.com/subsid/tba1.html).

    Stock Transfer Agent
        American Stock Transfer & Trust Company is the stock transfer agent
    and maintains shareholder activity records. The agent will respond to
    questions on issuance of stock certificates, change of ownership, lost
    stock certificates, and change of address. For these and similar matters,
    please direct inquiries to:

        American Stock Transfer & Trust Company
        Shareholder Services Department
        40 Wall Street, 46th Floor
        New York, New York 10005
        (718) 921-8200

    Dividend Policy
        The Company has never paid cash dividends and does not expect to pay
    cash dividends in the foreseeable future because its policy has been to
    use earnings to finance expansion and growth. Payment of dividends will
    rest within the discretion of the Board of Directors and will depend
    upon, among other factors, the Company's earnings, capital requirements,
    and financial condition.

                                        40PAGE
<PAGE>
    Thermo BioAnalysis Corporation                  1997 Financial Statements


    Form 10-K Report
        A copy of the Annual Report on Form 10-K for the fiscal year ended
    January 3, 1998, as filed with the Securities and Exchange Commission,
    may be obtained at no charge by writing to John N. Hatsopoulos, Chief
    Financial Officer, Thermo BioAnalysis Corporation, 81 Wyman Street, P.O.
    Box 9046, Waltham, Massachusetts 02254-9046.

    Annual Meeting
        The annual meeting of shareholders will be held on Monday, June 1,
    1998, at 9:00 a.m., at the Hyatt Regency Hotel, Scottsdale, Arizona.









                                        41<PAGE>