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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Quarter Ended September 27, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from_______ to _______
Commission File Number 0-6866
HELIX TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2423640
(State of incorporation) (IRS Employer Identification No.)
Mansfield Corporate Center
Nine Hampshire Street
Mansfield, Massachusetts 02048-9171
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 337-5111
_______________________________
Indicate by checkmark 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 ninety days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock as of the latest practicable date.
Class of Common Stock Outstanding at September 27, 1996
$1.00 par value 9,852,090 Shares
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HELIX TECHNOLOGY CORPORATION
Form 10-Q
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements 3-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. OTHER INFORMATION
Item 6 (a). Exhibits 9
Item 6 (b). Reports on Form 8-K 9
Signature 10
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HELIX TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
Sept. 27, 1996 Dec. 31, 1995
(in thousands) (unaudited) (audited)
ASSETS
Current:
Cash and cash equivalents $29,174 $21,697
Receivables - net of allowances 12,783 17,974
Inventories (Note 4) 12,893 12,122
Deferred income taxes (Note 3) 3,039 3,039
Other current assets 623 556
Total Current Assets 58,512 55,388
Property, plant and equipment at cost 27,475 25,387
Less: accumulated depreciation (18,927) (17,061)
Net property, plant and equipment 8,548 8,326
Other assets 5,796 5,360
TOTAL ASSETS $72,856 $69,074
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 4,372 $ 6,558
Payroll and compensation 3,479 3,755
Retirement costs 1,996 1,359
Income taxes 2,749 4,756
Other accrued liabilities 649 705
Total Current Liabilities 13,245 17,133
Deferred income taxes (Note 3) 388 388
Commitments - -
Stockholders' Equity:
Preferred stock, $1 par value; authorized
2,000,000 shares; issued and outstanding: none - -
Common stock, $1 par value; authorized 30,000,000
shares; issued and outstanding: 9,947,144 in
1996 and 9,776,944 in 1995 9,947 9,777
Capital in excess of par value 5,190 3,659
Treasury stock (95,054 shares) (3,040) -
Currency translation adjustment 865 1,307
Retained earnings 46,261 36,810
Total Stockholders' Equity 59,223 51,553
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $72,856 $69,074
The accompanying notes are an integral part of these financial statements.
Page 3
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HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
For the three and nine-month periods ended
September 27, 1996 and September 29, 1995
(unaudited)
(in thousands except per share data)
September 27, 1996 September 29, 1995
Three Nine Three Nine
Months Months Months Months
Net Sales $25,122 $104,679 $32,253 $88,437
Costs and expenses:
Cost of sales 13,469 55,288 17,745 48,935
Research and development 2,062 5,660 1,034 3,262
Selling, general and
administrative 4,620 16,250 5,046 14,080
20,151 77,198 23,825 66,277
Operating income 4,971 27,481 8,428 22,160
Joint venture income 469 1,221 249 1,127
Other 341 877 126 308
Income before taxes 5,781 29,579 8,803 23,595
Income taxes (Note 3) 1,906 10,789 3,301 8,774
Net income $ 3,875 $ 18,790 $ 5,502 $14,821
Net income per common share $ 0.39 $ 1.88 $ 0.55 $ 1.48
Average shares and equivalents 9,970 9,980 10,014 10,006
The accompanying notes are an integral part of these financial statements.
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HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the 39 weeks ended
(in thousands) Sept. 27, 1996 Sept. 29, 1995
Cash flows from operating activities:
Net income $18,790 $14,821
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 2,463 1,861
Undistributed earnings of joint venture, other (878) (279)
Net change in operating assets and
liabilities (A) 1,241 (931)
Net cash provided by operating activities 21,616 15,472
Cash flows from investing activities:
Capital expenditures (2,685) (2,228)
Net cash used by investing activities (2,685) (2,228)
Cash flows from financing activities:
Decrease in capital lease obligations - (36)
Shares tendered for exercise of stock options (2,065) (2,553)
Purchase of treasury stock (975) -
Net cash provided by employee stock plans 926 712
Cash dividends paid (9,340) (3,208)
Net cash used by financing activities (11,454) (5,085)
Increase in cash and cash equivalents 7,477 8,159
Cash and cash equivalents, at the
beginning of the period 21,697 8,050
Cash and cash equivalents, at the
end of the period $29,174 $16,209
(A) Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $ 5,191 $(3,905)
(Increase)/decrease in inventories (771) (2,212)
(Increase)/decrease in other current assets (67) 62
Increase/(decrease) in accounts payable (2,186) 1,374
Increase/(decrease) in other accrued expenses (926) 3,750
Net change in operating assets and
liabilities $ 1,241 $ (931)
The accompanying notes are an integral part of these financial statements.
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HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1
In the opinion of the Company, the accompanying consolidated financial
statements for the periods ended September 27, 1996, and September 29,
1995, contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position as of
September 27, 1996, and December 31, 1995, and the results of operations
and cash flows for the periods ended September 27, 1996, and September 29,
1995.
The results of operations for the nine-month period ended September 27,
1996, are not necessarily indicative of the results expected for the full
year.
The condensed financial statements included herein have been prepared by
the Company, without audit of the nine-month periods ended September 27,
1996, and September 29, 1995, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to present fairly the
Company's financial position. These condensed financial statements should
be read in conjunction with the financial statements and the notes thereto
included in the Company's latest annual report on Form 10-K. Certain
reclassifications have been made to prior years' consolidated statements of
cash flow to conform with the current presentation.
Note 2
Net Income Per Common Share
Net income per common share is based upon the weighted average number of
common shares and common share equivalents outstanding during the periods,
as determined by use of the treasury stock method. Primary and fully-
diluted net income per common share are essentially the same for the
periods presented.
Page 6
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HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3
Income Taxes
The federal, state and foreign income tax provisions of $10,789,000 and
$8,774,000 for the nine-month periods ended September 27, 1996, and
September 29, 1995, respectively, reflect the effects of various available
tax credits. Tax credits are treated as reductions of income tax
provisions in the year in which the credits are realized. The Company does
not provide for United States taxes on the undistributed earnings of its
wholly owned foreign subsidiaries.
A certain level of export income of the Company's Foreign Sales Corporation
(FSC) is permanently exempt from federal income tax; accordingly, the
income tax provisions for the nine-month periods ended September 27, 1996,
and September 29, 1995, include the federal tax benefit on export income of
the FSC.
The effective income tax rate for the nine-month periods ended
September 27, 1996, and September 29, 1995, was 36.48% and 37.20%,
respectively.
The major components of deferred tax assets and liabilities are inventory
valuation, compensation and depreciation, respectively. Based on past
experience, the Company expects that the future taxable income will be
sufficient for the realization of the deferred tax assets. The Company
believes that a valuation allowance is not required.
Note 4
Inventories
(in thousands) Sept. 27, 1996 Dec. 31, 1995
Finished goods $ 4,068 $ 3,870
Work in process 7,712 7,340
Materials and parts 1,113 912
Net inventories $12,893 $12,122
Inventories are stated at the lower of cost or market on a first-in, first-
out basis.
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HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the quarter were $25.1 million compared with $32.3 million a
year ago, a decrease of 22.3%. Sales for the first nine months of 1996
were $104.7 million compared with $88.4 million in the first nine months of
1995, an increase of 18.4%. The sales decline for the third quarter
resulted from the anticipated weakening in the semiconductor capital equipment
market. Nine-month sales for the Company are still at record levels due to
strong first-half performance in 1996.
Gross profit percentage for the quarter was 46.4% compared with 45.0% a
year ago. Gross profit percentage for the first nine months of 1996 was
47.2% versus 44.7% for the first nine months of 1995.
Research and development expenditures increased $2.4 million in the first
nine months of 1996 compared with the same period last year. Total
Selling, general and administrative expense increased by $2.2 million in
the first nine months of 1996 versus the first nine months of 1995. Total
Selling, general and administrative expense for the third quarter of 1996
decreased by $.4 million as compared to the third quarter of 1995 primarily
due to a decrease in the provision for performance-based compensation.
Operating income in the third quarter decreased by $3.5 million compared
with the third quarter of 1995. Operating income for the first nine months
of 1996 increased by $5.3 million compared with the same period a year ago.
The Company's provision for income taxes was $10.8 million and $8.8 million
for the first nine months of 1996 and 1995, respectively. The effective
tax rate for the first nine months of 1996 was 36.48% versus 37.20% for the
first nine months of 1995. The difference between the statutory federal
rate and the Company's effective tax rate is due to state and foreign
income taxes.
Liquidity and Capital Resources
Cash provided by operating activities for the first nine months of 1996 was
$21.6 million compared with $15.5 million for the comparable period last
year.
The Company has informal bank lines of credit available under various short-
term borrowing agreements totaling $12.0 million. There were no borrowings
under these agreements at the end of the third quarter of 1996.
Cash dividends paid to stockholders during the first nine months of 1996
were $9.3 million versus $3.2 million during the first nine months of last
year.
The Company believes anticipated cash flow from operations and funds
available under existing credit lines will be adequate to meet its
anticipated requirements.
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HELIX TECHNOLOGY CORPORATION
PART II. OTHER INFORMATION
Item 6(a). Exhibits
4A Description of Common Stock (incorporated herein, by
reference to Exhibit 3 to the Form 10-Q for the quarter
ended September 30, 1988).
4B Description of Preferred Stock (incorporated herein, by
reference to Exhibit 3 to the Form 10-Q for the quarter
ended September 30, 1988).
27 Financial Data Schedule (EDGAR version only)
Item 6(b). Reports on Form 8-K
No Form 8-K was required to be filed during the quarter ended
September 27, 1996.
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HELIX TECHNOLOGY CORPORATION
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.
HELIX TECHNOLOGY CORPORATION
(Registrant)
Date: October 24, 1996 By: Stephen D. Allison
Vice President and
Chief Financial Officer
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-27-1996
<CASH> 29,174
<SECURITIES> 0
<RECEIVABLES> 12,932
<ALLOWANCES> (149)
<INVENTORY> 12,893
<CURRENT-ASSETS> 58,512
<PP&E> 27,475
<DEPRECIATION> (18,927)
<TOTAL-ASSETS> 72,856
<CURRENT-LIABILITIES> 13,245
<BONDS> 0
0
0
<COMMON> 9,947
<OTHER-SE> 49,276
<TOTAL-LIABILITY-AND-EQUITY> 72,856
<SALES> 104,679
<TOTAL-REVENUES> 104,679
<CGS> 55,288
<TOTAL-COSTS> 21,910
<OTHER-EXPENSES> (2,098)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 29,579
<INCOME-TAX> 10,789
<INCOME-CONTINUING> 18,790
<DISCONTINUED> 0
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<NET-INCOME> 18,790
<EPS-PRIMARY> 1.88
<EPS-DILUTED> 1.88
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