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Announcing the winners of Inc.'s first national company-building achievement awards

FY ending 1/27/89 1/31/88 1/31/87
Employees 1,200 600 300
Net sales $257,810 $159,037 $69,450
Pretax income $21,163 $15,123 $3,866
Total assets $167,032 $56,232 $23,726
Net owners' equity $75,257 $9,457 $2,957

Hatsopoulos started Thermo Electron as soon as he got his doctoral degree from MIT. "My idea," he says, "was a broad-based technology company that would work simultaneously on lots of ideas that were risky but, if any one of them worked out, would be profitable." It's the venture capital investment theory applied to product R&D: if one of 20 pays off, the rest don't matter. And the product mix only appears strange to someone looking at Thermo Electron from the outside, Hatsopoulos says. "They all have a certain relationship with mechanical engineers -- people who deal with metallurgy, thermodynamics, fluids, etc." That is to say that insofar as they both present similar mechanical engineering challenges, the large industrial cogeneration systems and tiny human heart assists that Thermo Electron designed and manufactures aren't so different from each other. The Thermo Electron engineer who developed the company's bomb-detection device started on air pollution instruments, then went to blood gas analysis, and figured that if he could measure nitroglycerine in such tiny amounts there, maybe he could measure it in the air as well. "Our products," says Hatsopoulos, "are based on the broad capabilities of the people we have." And, he adds, on the company's strategic orientation. A company focusing on making computers, for instance, will produce different products from a company that's interested in process logic. Thermo Electron is more like the latter.

It does, for instance, allow investors to buy a piece of a biomedical products business without at the same time having to put money into a company that provides industrial heat-treating services. Furthermore, it lets Hatsopoulos fund expensive R&D without demolishing the profits, and thus the stock price, of Thermo Electron itself or its other subsidiaries. And it exerts pressure on and provides incentives to the entrepreneuring managers heading up these spin-offs. The incentives are easy to understand and appreciate. If the new company does well, the people who started it will grow wealthy on their stock options. But Hatsopoulos says there's another, subtler reason for taking the subsidiaries public. If they weren't, the performance of the people running them would be judged solely by corporate line managers, who may have personal axes to grind and their own career interests at heart. "Investors," he says, on the other hand, "have no ax to grind. They just want to make a lot of money." And, of course, Thermo Electron start-ups don't have to reinvent their own wheels -- accounting systems, public relations, personnel manuals. That's all done and easily adaptable. "I believe in small companies and in big," Hatsopoulos says, "and I'm trying to create something that has the advantages of both."

FY ending 12/31/88 12/31/87 12/31/86
Employees 4,610 3,900 3,680
Net sales $500,600 $383,383 $331,600
Pretax income $29,475 $24,553 $17,862
Total assets $490,109 $426,148 $308,890
Net owners' equity $181,509 $161,808 $145,767

"He was stuck in the back of nowhere," says Otten's wife, Chris, "and people [at Sherburne] paid little attention to him. . . . Every spring he'd say, 'We're outta here,' and we'd write up a new rÈsumÈ. But then he'd stay around to paint the chair lift." Along about 1976, says Chris, when her husband saw that Sherburne wasn't likely to do anything with Sunday River, he started talking about what he'd do "if this were my place." In the fall of 1980 he bought it the only way he could -- with virtually no money down. Sherburne took back a note for the entire $840,000 purchase price. In the fiscal year that had just ended, Sunday River had lost $240,000 on revenues of $541,000. All Otten could do was cut his costs, hang on, and plan his strategy. That winter he managed to bring the loss down 60%.

FY ending 7/31/88 7/26/87 7/27/86
Employees 550 500 300
Net sales $23,627 $20,923 $8,231
Pretax income $6,385 $5,224 $1,677
Total assets $19,409 $14,184 $9,277
Net owners' equity $9,255 $5,431 $2,305