SECURITIES AND EXCHANGE COMMISSION


                              Washington, DC 20549

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

                                    FORM 10-Q

    (mark one)

    [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934 for the Quarter Ended June 28, 1997.

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

                         Commission File Number 1-13876


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

    Delaware                                                       04-3242970
    (State or other jurisdiction of                          (I.R.S. Employer
    incorporation or organization)                        Identification No.)

    81 Wyman Street, P.O. Box 9046
    Waltham, Massachusetts                                         02254-9046
    (Address of principal executive offices)                       (Zip Code)


       Registrant's telephone number, including area code: (617) 622-1000

         Indicate by check mark whether the Registrant (1) has filed all
         reports required to be filed by Section 13 or 15(d) of the
         Securities Exchange Act of 1934 during the preceding 12 months
         (or for such shorter period that the Registrant was required to
         file such reports), and (2) has been subject to such filing
         requirements for the past 90 days. Yes [ X ] No [   ]
          
         Indicate the number of shares outstanding of each of the
         issuer's classes of Common Stock, as of the latest practicable
         date.

                    Class                   Outstanding at July 25, 1997
         ----------------------------       ----------------------------
         Common Stock, $.01 par value                 12,484,655
PAGE
<PAGE>
    PART I - FINANCIAL INFORMATION

    Item 1 - Financial Statements

                            THERMOSPECTRA CORPORATION

                           Consolidated Balance Sheet
                                   (Unaudited)

                                     Assets

                                                     June 28,   December 28,
    (In thousands)                                       1997           1996
    ------------------------------------------------------------------------
    Current Assets:
      Cash and cash equivalents                      $ 13,554       $ 16,580
      Accounts receivable, less allowances of
        $1,965 and $1,516                              38,700         32,327
      Inventories:
        Raw materials and supplies                     17,400         12,047
        Work in process                                 9,992          6,941
        Finished goods                                 12,194          8,054
      Prepaid income taxes                              6,834          5,931
      Other current assets                              1,990          1,722
                                                     --------       --------
                                                      100,664         83,602
                                                     --------       --------

    Property, Plant, and Equipment, at Cost            34,019         27,379
      Less: Accumulated depreciation and
            amortization                                9,286          7,210
                                                     --------       --------
                                                       24,733         20,169
                                                     --------       --------
    Patents, Trademarks, and Other Assets               6,012          5,556
                                                     --------       --------
    Equity Investment in Joint Venture                  2,452          2,382
                                                     --------       --------
    Cost in Excess of Net Assets of Acquired
      Companies (Note 2)                              114,732         40,776
                                                     --------       --------
                                                     $248,593       $152,485
                                                     ========       ========

                                        2PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                     Consolidated Balance Sheet (continued)
                                   (Unaudited)

                    Liabilities and Shareholders' Investment


                                                      June 28,  December 28,
    (In thousands except share amounts)                   1997          1996
    ------------------------------------------------------------------------
    Current Liabilities:
      Note payable                                    $  1,044      $    591
      Accounts payable                                  13,273        11,508
      Deferred revenue                                   3,926         3,453
      Accrued payroll and employee benefits              4,557         5,334
      Accrued installation and warranty expenses         4,690         3,396
      Accrued income taxes                               1,484         1,792
      Other accrued expenses                            12,486         9,586
      Due to affiliates                                  2,378         3,259
                                                      --------      --------
                                                        43,838        38,919
                                                      --------      --------
    Deferred Income Taxes and Other Deferred Items       1,577         1,645
                                                      --------      --------

    Long-term Obligations, Due to Thermo Electron
      and Thermo Instrument (Note 2)                    77,115        22,300
                                                      --------      --------

    Shareholders' Investment:
      Common stock, $.01 par value, 25,000,000 shares
        authorized; 15,351,572 and 12,439,950 shares
        issued                                             154           124
      Capital in excess of par value                   112,227        77,416
      Retained earnings                                 14,615        12,345
      Treasury stock at cost, 423 and 305 shares            (7)           (5)
      Cumulative translation adjustment                   (926)         (259)
                                                      --------      --------
                                                       126,063        89,621
                                                      --------      --------
                                                      $248,593      $152,485
                                                      ========      ========


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

                                        3PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                        Consolidated Statement of Income
                                   (Unaudited)


                                                       Three Months Ended
                                                     -----------------------
                                                    June 28,        June 29,
    (In thousands except per share amounts)             1997            1996
    ------------------------------------------------------------------------
    Revenues                                         $49,692         $31,281
                                                     -------         -------

    Costs and Operating Expenses:
      Cost of revenues                                27,990          16,201
      Selling, general, and administrative expenses   13,374           9,255
      Research and development expenses                4,352           3,319
      Other nonrecurring expense (Note 3)                800               -
                                                     -------         -------
                                                      46,516          28,775
                                                     -------         -------

    Operating Income                                   3,176           2,506

    Interest Income                                      222             239
    Interest Expense                                     (22)              -
    Interest Expense, Related Party                   (1,170)           (102)
                                                     -------         -------
    Income Before Provision for Income Taxes           2,206           2,643
    Provision for Income Taxes                           869           1,081
                                                     -------         -------
    Net Income                                       $ 1,337         $ 1,562
                                                     =======         =======
    Earnings per Share                               $   .09         $   .13
                                                     =======         =======
    Weighted Average Shares                           15,331          12,436
                                                     =======         =======


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

                                        4PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                        Consolidated Statement of Income
                                   (Unaudited)


                                                         Six Months Ended
                                                     -----------------------
                                                    June 28,        June 29,
    (In thousands except per share amounts)             1997            1996
    ------------------------------------------------------------------------
    Revenues                                         $86,869         $58,208
                                                     -------         -------
    Costs and Operating Expenses:
      Cost of revenues                                48,892          30,340
      Selling, general, and administrative expenses   23,725          17,076
      Research and development expenses                7,784           6,075
      Other nonrecurring expense (Note 3)                800               -
                                                     -------         -------
                                                      81,201          53,491
                                                     -------         -------

    Operating Income                                   5,668           4,717

    Interest Income                                      408             512
    Interest Expense                                     (48)              -
    Interest Expense, Related Party                   (1,663)           (209)
                                                     -------         -------
    Income Before Provision for Income Taxes           4,365           5,020
    Provision for Income Taxes                         1,840           2,022
                                                     -------         -------
    et Income                                        $ 2,525         $ 2,998
                                                     =======         =======
    Earnings per Share                               $   .18         $   .24
                                                     =======         =======
    Weighted Average Shares                           14,173          12,435
                                                     =======         =======


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

                                        5PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                      Consolidated Statement of Cash Flows
                                   (Unaudited)

                                                        Six Months Ended
                                                    ------------------------
                                                     June 28,       June 29,
    (In thousands)                                       1997           1996
    ------------------------------------------------------------------------
    Operating Activities:
      Net income                                     $  2,525       $  2,998
      Adjustments to reconcile net income to net
        cash provided by operating activities:
          Depreciation and amortization                 3,106          2,158
          Other nonrecurring expense (Note 3)             800              -
          Provision for losses on accounts
            receivable                                    172            146
          Other noncash expenses                          499            293
          Changes in current accounts, excluding
            the effects of acquisitions:
              Accounts receivable                       3,347           (100)
              Inventories                                (919)           964
              Other current assets                        643           (307)
              Accounts payable                         (1,555)           939
              Due to affiliates                        (1,941)        (1,092)
              Other current liabilities                (4,377)        (2,838)
          Other, net                                       27              -
                                                     --------       --------
    Net cash provided by operating activities           2,327          3,161
                                                     --------       --------
    Investing Activities:
      Acquisitions, net of cash acquired (Note 2)     (13,885)          (994)
      Purchases of property, plant, and equipment      (1,133)        (1,940)
      Proceeds from sale of property, plant, and
        equipment                                          22             55
      Purchases of available-for-sale investments           -         (3,000)
      Other, net                                         (651)           (89)
                                                     --------       --------
    Net cash used in investing activities             (15,647)        (5,968)
                                                     --------       --------
    Financing Activities:
      Proceeds from issuance of long-term
        obligation to Thermo Electron Corporation
        (Note 2)                                       10,000              -
      Net proceeds from issuance of Company common
        stock                                             188             51
      Increase in short-term borrowings, net              405              -
                                                     --------       --------
    Net cash provided by financing activities          10,593             51
                                                     --------       --------
    Exchange Rate Effect on Cash                         (299)           (89)
                                                     --------       --------

    Decrease in Cash and Cash Equivalents              (3,026)        (2,845)
    Cash and Cash Equivalents at Beginning of Period   16,580         20,306
                                                     --------       --------
    Cash and Cash Equivalents at End of Period       $ 13,554       $ 17,461
                                                     ========       ========
                                        6PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                Consolidated Statement of Cash Flows (continued)
                                   (Unaudited)


                                                         Six Months Ended
                                                      ----------------------
                                                      June 28,      June 29,
    (In thousands)                                        1997          1996
    ------------------------------------------------------------------------
    Noncash Activities:
      Fair value of assets of acquired companies      $108,820      $ 30,178
      Cash paid for acquired companies                 (17,044)         (998)
      Stock options issued for acquired company         (2,080)            -
      Stock issued to parent company for acquired
        company                                        (32,571)            -
      Due to parent company for acquired
        companies                                      (44,815)      (21,527)
                                                      --------      --------
        Liabilities assumed of acquired companies     $ 12,310      $  7,653
                                                      ========      ========

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

                                        7PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                  Notes to Consolidated Financial Statements


   1.  General

       The interim consolidated financial statements presented have been
   prepared by ThermoSpectra Corporation (the Company) without audit and, in
   the opinion of management, reflect all adjustments of a normal recurring
   nature necessary for a fair statement of the financial position at June
   28, 1997, the results of operations for the three- and six-month periods
   ended June 28, 1997, and June 29, 1996, and the cash flows for the
   six-month periods ended June 28, 1997, and June 29, 1996. Interim results
   are not necessarily indicative of results for a full year.

       The consolidated balance sheet presented as of December 28, 1996, has
   been derived from the consolidated financial statements that have been
   audited by the Company's independent public accountants. The consolidated
   financial statements and notes are presented as permitted by Form 10-Q
   and do not contain certain information included in the annual financial
   statements and notes of the Company. The consolidated financial
   statements and notes included herein should be read in conjunction with
   the financial statements and notes included in the Company's Annual
   Report on Form 10-K for the fiscal year ended December 28, 1996, filed
   with the Securities and Exchange Commission.

   2.  Acquisitions

       In March 1997, Thermo Instrument Systems Inc. (Thermo Instrument),
   the Company's majority shareholder, 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. In July 1997, the Company
   agreed to acquire NESLAB Instruments, Inc. and its related sales and
   service entity, NESLAB Instruments Europa BV in the Netherlands,
   (NESLAB), a global supplier of temperature-control products and former
   LSI subsidiary, from Thermo Instrument for $77.4 million. The purchase
   price represents the sum of the net tangible book value of the business
   as of June 28, 1997, plus a percentage of Thermo Instrument's total
   goodwill associated with its acquisition of LSI, based on the aggregate
   1996 revenues of NESLAB relative to LSI's 1996 consolidated revenues. The
   purchase price is subject to a post-closing adjustment based on final
   determination of the net tangible book value of the acquired business and
   a final calculation of Thermo Instrument's total goodwill associated with
   the acquisition of LSI.

       The purchase price will be paid through the issuance of 2,869,717
   shares of Company common stock valued at $32.6 million and the assumption
   of $44.8 million of debt payable to Thermo Instrument. Issuance of the
   common stock component of the purchase price will occur immediately after
   its listing upon the American Stock Exchange, 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.

                                        8PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

   2.  Acquisitions (continued)

       In connection with the acquisition of NESLAB, Thermo Electron
   Corporation (Thermo Electron) intends to lend the Company $45.0 million
   pursuant to a promissory note due July 1999 and bearing interest at the
   90-day Commercial Paper Composite Rate plus 25 basis points, set at the
   beginning of each quarter. The Company will use the proceeds from the
   long-term note to repay Thermo Instrument for the debt assumed in
   connection with the NESLAB acquisition. Accordingly, the debt to Thermo
   Instrument has been classified as long-term in the accompanying 1997
   balance sheet.

       Because the Company and NESLAB 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 NESLAB from March 12, 1997, the date the business was acquired
   by Thermo Instrument, and the shares issuable subject to shareholder vote
   have been deemed outstanding from that date. The purchase price included
   $255,000 for the increase in net book value from the date the business
   was acquired by Thermo Instrument to June 28, 1997. This amount was
   recorded as a reduction in retained earnings. The cost of this
   acquisition exceeded the estimated fair value of the net assets by $59.2
   million, which is being amortized over 40 years.

       On March 12, 1997, the Company acquired Park Scientific Instruments
   Corporation (PSI), a manufacturer of scanning-probe microscopes used in
   industry and academia to test and measure the topography and other
   surface properties of materials, for $17.0 million in cash, including the
   repayment of $1.3 million of bank debt. In addition, the Company assumed
   outstanding PSI stock options that are exercisable into 183,940 shares of
   Company common stock at a weighted average exercise price of $3.44 per
   share, with an aggregate value of $2.1 million as of the date of the
   merger agreement. The purchase price is subject to a post-closing
   adjustment based on the acquired net assets of PSI. In connection with
   the acquisition of PSI, the Company borrowed $10.0 million from Thermo
   Electron pursuant to a promissory note due March 1999 and bearing
   interest at the 90-day Commercial Paper Composite Rate plus 25 basis
   points, set at the beginning of each quarter. The acquisition of PSI has
   been accounted for using the purchase method of accounting, and the
   results of operations have been included in the accompanying financial
   statements from the date of acquisition. The cost of this acquisition
   exceeded the estimated fair value of the acquired net assets by $16.1
   million, which is being amortized over 40 years.

       Allocation of the purchase price for these acquisitions was based on
   an estimate of the fair value of the net assets acquired and is subject
   to adjustment upon finalization of the purchase price and related
   allocation.

                                        9PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

   2.  Acquisitions (continued)

       Based on unaudited data, the following table presents selected
   financial information for the Company, NESLAB, and PSI on a pro forma
   basis, assuming the companies had been combined since the beginning of
   1996.

                                  Three Months Ended     Six Months Ended
                                  ------------------  -------------------
   (In thousands except                June 29,       June 28,   June 29,
   per share amounts)                      1996           1997       1996
   ----------------------------------------------------------------------
   Revenues                             $51,886        $98,381    $96,648
   Net income                             1,828          1,972      2,997
   Earnings per share                       .12            .13        .20

       The pro forma results are not necessarily indicative of future
   operations or the actual results that would have occurred had the
   acquisitions of NESLAB and PSI been made at the beginning of 1996.

   3. Other Nonrecurring Expense

      During the second quarter of 1997, the Company's Gould Instrument
   Systems, Inc. subsidiary incurred an $800,000 charge related to severance
   costs for 33 employees terminated during the quarter. Other accrued
   expenses in the accompanying balance sheet includes a remaining reserve
   of $462,000 associated with these staff reductions.

   Item 2 - Management's Discussion and Analysis of Financial Condition and
            Results of Operations

       Forward-looking statements, within the meaning of Section 21E of the
   Securities and Exchange Act of 1934, are made throughout this
   Management's Discussion and Analysis of Financial Condition and Results
   of Operations. For this purpose, any statements contained herein that are
   not statements of historical fact may be deemed to be forward-looking
   statements. Without limiting the foregoing, the words "believes,"
   "anticipates," "plans," "expects," "seeks," "estimates," and similar
   expressions are intended to identify forward-looking statements. There
   are a number of important factors that could cause the results of the
   Company to differ materially from those indicated by such forward-looking
   statements, including those detailed under the caption "Forward-looking
   Statements" in Exhibit 13 to the Company's Annual Report on Form 10-K for
   the fiscal year ended December 28, 1996, filed with the Securities and
   Exchange Commission.

   Overview

       The Company develops, manufactures, and markets precision imaging,
   inspection, temperature control, and test and measurement instruments.
   These instruments are generally combined with proprietary operations and
   analysis software to provide industrial and research customers with
   integrated systems that address their specific needs. The Company's
   products include digital signal measurement systems consisting of digital
   oscillographic recorders, digital storage oscilloscopes (DSOs), and data
   acquisition systems; X-ray microanalyzers; nondestructive X-ray
   inspection systems; X-ray fluorescence instruments; specialty X-ray

                                       10PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

   Overview (continued)

   tubes; and confocal laser scanning microscopes. In 1997, the Company
   broadened its product offerings through the acquisition of Park
   Scientific Instruments Corporation (PSI), a manufacturer of
   scanning-probe microscopes, in March 1997; NESLAB Instruments, Inc.
   (NESLAB), a supplier of temperature-control products, effective for
   accounting purposes in March 1997; and Sierra Research and Technology
   Inc. (SRT), a manufacturer of systems used for the rework and repair of
   printed circuit boards, in July 1997.

       The Company's growth strategy includes acquiring complementary
   businesses, developing new applications for its technology to address
   related market segments, and strengthening its presence in selected
   geographic markets. Certain acquisitions the Company has made have been
   businesses with strong technologies and a good reputation and presence in
   the markets in which they compete, but relatively poor profitability
   because of high manufacturing and operating expenses. The Company's goal
   for these acquisitions is to reduce these expenses and thereby improve
   the acquired companies' profitability. Businesses the Company may acquire
   in the future may have these same financial characteristics. Because the
   Company competes primarily on the basis of its technology, it will also
   need to continually improve the technology underlying the products of any
   company it acquires.

       The Company conducts all of its manufacturing operations in the
   United States, except for the production of certain DSOs that are
   manufactured in England. The Company sells its products on a worldwide
   basis. The Company anticipates that a significant portion of its revenues
   will be from sales to customers outside the United States. The Company's
   business activities outside the United States are conducted through sales
   and service subsidiaries and through third-party representatives and
   distributors. The results of the Company's international operations are
   subject to foreign currency fluctuations, and the exchange rate value of
   the dollar may have a significant impact on both revenues and earnings.
   The Company may use forward contracts to reduce its exposure to currency
   fluctuations.

   Results of Operations

   Second Quarter 1997 Compared With Second Quarter 1996

       Revenues were $49.7 million in the second quarter of 1997, compared
   with $31.3 million in the second quarter of 1996, an increase of 59%.
   Revenues increased $19.9 million due to the inclusion of revenues from
   NESLAB, which was acquired for accounting purposes effective March 12,
   1997, and PSI, which was acquired on March 12, 1997 (Note 2). Revenues
   from existing operations declined 3% in 1997 compared with 1996.
   Increased revenues due to overall higher demand for inspection systems
   manufactured by the Company's Nicolet Imaging Systems division were more
   than offset by a decline in demand for the Company's digital signal
   measurement systems. Revenues were adversely affected by approximately
   $0.6 million due to the strengthening in the value of the U.S. dollar
   relative to currencies in foreign countries in which the Company
   operates.

                                       11PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

   Second Quarter 1997 Compared With Second Quarter 1996 (continued)

       The gross profit margin declined to 43.7% in the second quarter of
   1997 from 48.2% in the second quarter of 1996, due primarily to the
   inclusion of lower-margin revenues at NESLAB and, to a lesser extent,
   lower margins at the Company's existing businesses due to lower revenues.
   The gross profit margin for NESLAB was 36% for the second quarter of
   1997.

       Selling, general, and administrative expenses as a percentage of
   revenues decreased to 26.9% in the second quarter of 1997 from 29.6% in
   the second quarter of 1996, due principally to the inclusion of lower
   selling expenses as a percentage of revenues at NESLAB, offset in part by
   the inclusion of higher selling, general, and administrative expenses as
   percentage of revenues at PSI. Overall selling, general, and
   administrative expense levels at the Company's existing operations were
   unchanged in 1997 compared with 1996.

       Research and development expenses as a percentage of revenues
   decreased to 8.8% in the second quarter of 1997 from 10.6% in the second
   quarter of 1996, due principally to the inclusion of NESLAB, and a higher
   level of research and development spending at the Company's existing
   operations during the 1996 period as a result of development efforts for
   new-product introductions at two of the Company's subsidiaries.

       During the second quarter of 1997, the Company's Gould Instrument
   Systems, Inc. subsidiary incurred an $800,000 charge related to severance
   costs for 33 employees terminated during the quarter. Other accrued
   expenses in the accompanying balance sheet includes a remaining reserve
   of $462,000 associated with these staff reductions.

       Interest expense, related party increased to $1.2 million in 1997
   from $0.1 million in 1996 due to the assumption of $44.8 million of debt
   in connection with the acquisition of NESLAB, the issuance of a $10
   million note to Thermo Electron Corporation (Thermo Electron) in
   connection with the March 1997 acquisition of PSI, and the issuance of a
   $15 million promissory note to Thermo Electron in August 1996 in
   connection with the acquisitions of Kevex Instruments and Kevex X-Ray
   (the Kevex businesses). 

       The effective tax rate was 39.4% in the second quarter of 1997,
   compared with 40.9% in the second quarter of 1996. The effective tax
   rates exceed the statutory federal income tax rate due primarily to the
   impact of state income taxes and nondeductible amortization of cost in
   excess of net assets of acquired companies for certain of the Company's
   acquisitions.

   First Six Months 1997 Compared With First Six Months 1996

       Revenues were $86.9 million in the first six months of 1997, compared
   with $58.2 million in the first six months of 1996, an increase of 49%.
   Revenues increased $31.1 million due to the inclusion of revenues from
   NESLAB and PSI, acquired in 1997, and the inclusion of revenues for the
   full six-month period from the Kevex businesses, acquired effective March
   29, 1996. Revenues from existing operations declined 2% in 1997 compared

                                       12PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

   First Six Months 1997 Compared With First Six Months 1996 (continued)

   with 1996, due to the reasons described in the results of operations for
   the second quarter. Revenues were adversely affected by approximately
   $1.3 million due to the  strengthening in the value of the U.S. dollar
   relative to currencies in foreign countries in which the Company
   operates.

       The gross profit margin declined to 43.7% in the first six months of
   1997 from 47.9% in the first six months of 1996, due to the reasons
   discussed in the results of operations for the second quarter.

       Selling, general, and administrative expenses as a percentage of
   revenues decreased to 27.3% in the first six months of 1997 from 29.3% in
   the first six months of 1996, due to the reasons discussed in the results
   of operations for the second quarter.

       Research and development expenses as a percentage of revenues
   decreased to 9.0% in the first six months of 1997 from 10.4% in the first
   six months of 1996, due to the reasons discussed in the results of
   operations for the second quarter.

       Interest income decreased to $408,000 in the first six months of 1997
   from $512,000 in the first six months of 1996 due to lower cash balances
   as a result of cash used to partially fund the acquisitions of the Kevex
   businesses, which was paid to Thermo Instrument in August 1996, and PSI.
   Interest expense, related party increased to $1.7 million in 1997 from
   $0.2 million in 1996 due to the assumption of $44.8 million of debt in
   connection with the acquisition of NESLAB, the issuance of a $10 million
   note to Thermo Electron in connection with the March 1997 acquisition of
   PSI, and the issuance of a $15 million promissory note to Thermo Electron
   in August 1996 in connection with the acquisition of the Kevex
   businesses.

       The effective tax rate was 42.2% in 1997, compared with 40.3% in
   1996. The effective tax rates exceed the statutory federal income tax
   rate due primarily to the impact of state income taxes and nondeductible
   amortization of cost in excess of net assets of acquired companies for
   certain of the Company's acquisitions. The increase in the effective tax
   rate in 1997 was due to a higher nondeductible amortization of cost in
   excess of net assets of acquired companies as a result of the acquisition
   of NESLAB.

   Liquidity and Capital Resources

       Consolidated working capital was $56.8 million at June 28, 1997,
   compared with $44.7 million at December 28, 1996. Included in working
   capital are cash and cash equivalents of $13.6 million at June 28, 1997,
   compared with $16.6 million at December 28, 1996.

       Cash provided by operating activities was $2.3 million in the first
   six months of 1997. Excluding the impact of the acquired net assets of
   PSI and NESLAB, accounts receivable, accounts payable, and current
   liabilities decreased, primarily due to higher revenue levels in the  
   fourth quarter of 1996 compared with the second quarter of 1997.
   Additionally, the Company used cash to reduce intercompany balances at
   the acquired NESLAB business.

                                       13PAGE
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                            THERMOSPECTRA CORPORATION

   Liquidity and Capital Resources (continued)

      The Company used $15.6 million of cash for investing activities
   during the first six months of 1997. The Company's financing activities
   provided $10.6 million of cash during the period. In March 1997, the
   Company acquired PSI for $17.0 million in cash, including the repayment
   of $1.3 million of bank debt, subject to a post-closing adjustment (Note
   2). In addition, the Company assumed outstanding PSI stock options that
   are exercisable into 183,940 shares of Company common stock at a weighted
   average exercise price of $3.44 per share, with an aggregate value of
   approximately $2.1 million as of the date of the merger agreement. In
   connection with the acquisition of PSI, the Company borrowed $10.0
   million from Thermo Electron pursuant to a promissory note due March 1999
   and bearing interest at the 90-day Commercial Paper Composite Rate plus
   25 basis points, set at the beginning of each quarter.

       In July 1997, the Company agreed to purchase NESLAB from Thermo
   Instrument for $77.4 million, which will be paid through the issuance of
   2,869,717 shares of Company common stock valued at $32.6 million and the
   assumption of $44.8 million of debt payable to Thermo Instrument (Note
   2). In connection with the acquisition of NESLAB, Thermo Electron intends
   to lend the Company $45.0 million pursuant to a promissory note due July
   1999 and bearing interest at the 90-day Commercial Paper Composite Rate
   plus 25 basis points, set at the beginning of each quarter. The Company
   will use the proceeds from the note to repay Thermo Instrument for the  
   debt assumed in connection with the NESLAB acquisition.

       In July 1997, the Company acquired SRT for approximately $7.5 million
   in cash. In connection with the acquisition of SRT, the Company borrowed
   $5.0 million from Thermo Electron pursuant to a promissory note due July
   1999 and bearing interest at the 90-day Commercial Paper Composite Rate
   plus 25 basis points, set at the beginning of each quarter.

       The Company expended $1.1 million during the first six months of 1997
   for purchases of property, plant, and equipment. The Company plans to
   expend an additional $1.7 million for capital expenditures during the
   remainder of 1997.

       Although the Company expects to generate positive cash flow from its
   existing operations, the Company may require significant amounts of cash
   to pursue the acquisition of complementary businesses. The Company
   expects that it will finance any such acquisitions through a combination
   of internal funds, additional equity financing or convertible debt
   financing from the capital markets, and/or borrowings from Thermo
   Instrument or Thermo Electron, although it has no agreement with these
   companies to ensure that funds will be available on acceptable terms or
   at all, except as described above. The Company believes that its existing
   resources and cash provided by operations are sufficient to meet the
   capital requirements of its existing businesses for the foreseeable
   future.

                                       14PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

   PART II - OTHER INFORMATION

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

       On June 2, 1997, at the Annual Meeting of Stockholders, the
   Stockholders elected five incumbent directors to a one-year term expiring
   in 1998. The Directors elected at the meeting were: Mr. Robert E.
   Finnigan, Dr. Elias P. Gyftopoulos, Mr. Earl R. Lewis, Mr. Theo
   Melas-Kyriazi, and Mr. Arvin H. Smith. Each director received 11,375,058
   shares voted in favor of his election and 4,300 shares voted against. No
   abstentions or broker nonvotes were recorded on the election of
   directors.

   Item 6 - Exhibits

       See Exhibit Index on the page immediately preceding exhibits.

                                       15PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                                  SIGNATURES


       Pursuant to the requirements of the Securities Exchange Act of 1934,
   the Registrant has duly caused this report to be signed on its behalf by
   the undersigned thereunto duly authorized as of the 5th day of August
   1997.

                                          THERMOSPECTRA CORPORATION



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



                                          John N. Hatsopoulos
                                          ---------------------
                                          John N. Hatsopoulos
                                          Vice President and Chief
                                            Financial Officer

                                       16PAGE
<PAGE>
                            THERMOSPECTRA CORPORATION

                                 EXHIBIT INDEX


   Exhibit
   Number       Description of Exhibit
   ------------------------------------------------------------------------

      2.1       Share purchase agreement dated as of July 30, 1997,
                among the Company and Thermo Instrument Systems Inc.

     10         $5,000,000 Promissory Note dated as of August 1, 1997,
                issued by the Company to Thermo Electron Corporation.

     27         Financial Data Schedule.