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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 March 28, 1997.
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 March 28, 1997
$1.00 par value 9,879,443 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 8-9
Part II. OTHER INFORMATION
Item 4 (a). Date of Annual Meeting of Stockholders 10
Item 6 (a). Exhibits 10
Item 6 (b). Reports on Form 8-K 10
Signature 11
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HELIX TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
Mar. 28, 1997 Dec. 31, 1996
(in thousands) (unaudited) (audited)
ASSETS
Current:
Cash and cash equivalents $ 29,752 $ 29,378
Receivables - net of allowances 15,077 11,525
Inventories (Note 4) 11,588 12,370
Deferred income taxes (Note 3) 3,414 3,414
Other current assets 1,087 842
Total Current Assets 60,918 57,529
Property, plant and equipment at cost 24,632 24,219
Less: accumulated depreciation (16,476) (15,837)
Net property, plant and equipment 8,156 8,382
Other assets 5,865 5,848
TOTAL ASSETS $ 74,939 $ 71,759
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 5,440 $ 4,780
Payroll and compensation 2,158 3,438
Retirement costs 2,417 2,212
Income taxes 2,873 1,049
Other accrued liabilities 491 442
Total Current Liabilities 13,379 11,921
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: 9,886,090 in
1997 and 9,862,590 in 1996 9,886 9,863
Capital in excess of par value 4,657 3,162
Treasury stock (6,647 shares) (232) -
Currency translation adjustment 568 833
Retained earnings 46,681 45,980
Total Stockholders' Equity 61,560 59,838
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 74,939 $ 71,759
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
(unaudited)
For the 13 weeks ended
(in thousands except per share data) Mar. 28, 1997 Mar. 29, 1996
Net Sales $29,022 $40,206
Costs and expenses:
Cost of sales 15,559 21,239
Research and development 1,875 1,627
Selling, general and administrative 5,745 6,089
23,179 28,955
Operating income 5,843 11,251
Joint venture income 314 401
Interest income 349 279
Other (9) (59)
Income before taxes 6,497 11,872
Income taxes (Note 3) (2,339) (4,482)
Net income $ 4,158 $ 7,390
Net income per common share $ 0.42 $ 0.74
Average shares and equivalents 9,961 10,008
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 13 weeks ended
(in thousands) Mar. 28, 1997 Mar. 29, 1996
Cash flows from operating activities:
Net income $ 4,158 $ 7,390
Adjustments to reconcile net income to net
cash provided (used) by operating
activities:
Depreciation 639 1,032
Undistributed earnings of joint venture,
other (282) (263)
Net change in operating assets and
liabilities (A) (317) (1,925)
Net cash provided by operating activities 4,198 6,234
Cash flows from investing activities:
Capital expenditures (413) (554)
Net cash used by investing activities (413) (554)
Cash flows from financing activities:
Shares tendered for exercise of stock
options (232) -
Net cash provided by employee stock plans 278 108
Cash dividends paid (3,457) (2,449)
Net cash used by financing activities (3,411) (2,341)
Increase in cash and cash equivalents 374 3,339
Cash and cash equivalents, at the beginning
of the period 29,378 21,697
Cash and cash equivalents, at the end
of the period $29,752 $25,036
(A)Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $(3,552) $(1,984)
(Increase)/decrease in inventories 782 (622)
(Increase)/decrease in other current assets (245) (93)
Increase/(decrease) in accounts payable 660 1,157
Increase/(decrease) in other accrued expenses 2,038 (383)
Net change in operating assets and
liabilities $ (317) $(1,925)
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 March 28, 1997, and March 29, 1996,
contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position as of March 28, 1997,
and December 31, 1996, and the results of operations and cash flows for the
periods ended March 28, 1997, and March 29, 1996.
The results of operations for the three-month period ended March 28, 1997,
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 three-month periods ended March 28, 1997,
and March 29, 1996, 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.
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.
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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 $2,339,000 and
$4,482,000 for the three-month periods ended March 28, 1997, and March 29,
1996, 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 three-month periods ended
March 28, 1997, and March 29, 1996, include the federal tax benefit on
export income of the FSC.
The effective income tax rate for the three-month periods ended March 28,
1997, and March 29, 1996, was 36.0% and 37.75%, respectively.
The major components of deferred tax assets and liabilities are inventory
valuation, compensation and leases, 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) Mar. 28, 1997 Dec. 31, 1996
Finished goods $ 3,821 $ 3,854
Work in process 6,981 7,655
Materials and parts 786 861
Net inventories $11,588 $12,370
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
Revenues for the first quarter of 1997 were $29.0 million compared with
$40.2 million for the first quarter of 1996, a decrease of 27.8%. This
decline in quarterly revenues is a result of a slowdown in the global
market for semiconductor capital equipment which began during the second
half of 1996. The most recent quarter revenues show a marked improvement
from the fourth quarter of 1996, and sequential quarterly sales were up
$5.3 million or 22.4%.
Gross profit percentage for the quarter was 46.4% compared with 47.2% a
year ago and 46.0% for the preceding quarter. The company's flexible
manufacturing strategies have resulted in continued strong gross profit
performance.
Research and development expenditures increased $.2 million compared with
the same period last year. Total Selling, general and administrative
expense decreased by $.3 million primarily due to decreases in variable
selling costs.
Operating income in the first quarter decreased $5.4 million compared with
the first quarter of 1996 due to lower revenue levels.
The Company's provision for income taxes was $2.3 million and $4.5 million
for the first quarter of 1997 and 1996, respectively. The effective tax
rate for the three-month periods ended March 28, 1997, and March 29, 1996,
was 36.0% and 37.75%, respectively. 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 quarter of 1997 was
$4.2 million compared with $6.2 million for the comparable period last
year.
The Company's informal bank lines of credit amount to $12.0 million. There
were no borrowings under these agreements at the end of the first quarter
of 1997.
Cash dividends paid to stockholders during the first quarter of 1997 were
$3.5 million or $.35 per common share compared with $2.4 million or $.25
per common share for the first quarter of 1996.
The Company believes anticipated cash flow from operations and funds
available under existing credit lines will be adequate to meet its
anticipated requirements.
Page 8
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HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Business Risks and Uncertainties
The Company operates in a changing and cyclical business environment that
involves a number of risks, some of which are beyond the Company's control.
The Company's future results will depend on its ability to manage the
cyclical nature of the semiconductor capital equipment industry, the
Company's ability to introduce new products to meet its customers' demands
for higher productivity and reliability, and the dependence of the Company
on key customers and key suppliers.
Forward-Looking Statements
This 10Q, other SEC filings, and pronouncements and press releases made
from time to time by the Company through its senior management may include
a number of forward-looking statements, including, but not limited to,
statements with respect to the Company's future financial performance,
operating results, plans and objectives. Such statements are made pursuant
to the Safe Harbor provisions of the Private Securities Litigation Reform
Act of 1995. Actual results may differ materially from those anticipated
by such statements depending upon a variety of factors, some of which are
itemized in the "Business Risks and Uncertainties" section above. The
Company undertakes no responsibility to update any forward-looking
statements which may be made to reflect events or circumstances occurring
after the dates the statements were made or to reflect the occurrence of
unanticipated events.
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HELIX TECHNOLOGY CORPORATION
PART II. OTHER INFORMATION
Item 4(a). Date of Annual Meeting of Stockholders
The Company's Annual Meeting of Stockholders will be held on
April 30, 1997.
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
March 28, 1997.
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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)
April 17, 1997 By: Robert J. Lepofsky
Date (Signature)
President and Chief Executive Officer
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<S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-28-1997
<CASH> 29,752
<SECURITIES> 0
<RECEIVABLES> 15,223
<ALLOWANCES> (146)
<INVENTORY> 11,588
<CURRENT-ASSETS> 60,918
<PP&E> 24,632
<DEPRECIATION> (16,476)
<TOTAL-ASSETS> 74,939
<CURRENT-LIABILITIES> 13,379
<BONDS> 0
0
0
<COMMON> 9,886
<OTHER-SE> 51,674
<TOTAL-LIABILITY-AND-EQUITY> 74,939
<SALES> 29,022
<TOTAL-REVENUES> 29,022
<CGS> 15,559
<TOTAL-COSTS> 7,620
<OTHER-EXPENSES> (654)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,497
<INCOME-TAX> 2,339
<INCOME-CONTINUING> 4,158
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 4,158
<EPS-PRIMARY> 0.42
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