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 25, 1998.
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 [ ]
The number of shares outstanding of the registrant's Common Stock, $1 par value,
as of September 25, 1998 was 22,285,131.
<PAGE>
HELIX TECHNOLOGY CORPORATION
Form 10-Q
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements..............................3-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....11-14
Part II. OTHER INFORMATION
Item 6 (a). Exhibits............................................15
Item 6 (b). Reports on Form 8-K.................................15
Signature....................................................................16
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
- --------------------------------------------------------------------------------------------
<CAPTION>
(in thousands) Sept. 25, 1998 Dec. 31, 1997
- --------------------------------------------------------------------------------------------
ASSETS
Current:
<S> <C> <C>
Cash and cash equivalents $ 8,351 $ 34,717
Short-term investments (Note 2) 20,967 3,675
- --------------------------------------------------------------------------------------------
29,318 38,392
Receivables - net of allowances 10,875 18,185
Inventories (Note 3) 15,314 15,371
Deferred income taxes (Note 4) 4,241 4,234
Other current assets 1,644 1,119
- --------------------------------------------------------------------------------------------
Total Current Assets 61,392 77,301
- --------------------------------------------------------------------------------------------
Property, plant and equipment at cost 35,492 34,252
Less: accumulated depreciation (24,947) (22,109)
- --------------------------------------------------------------------------------------------
Net property, plant and equipment 10,545 12,143
Other assets 6,657 6,775
- --------------------------------------------------------------------------------------------
TOTAL ASSETS $ 78,594 $ 96,219
============================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 3,922 $ 5,036
Payroll and compensation 2,065 4,298
Retirement costs 4,176 3,501
Income taxes (Note 4) - 3,022
Other accrued liabilities (Note 8) 2,462 667
- --------------------------------------------------------------------------------------------
Total Current Liabilities 12,625 16,524
- --------------------------------------------------------------------------------------------
Commitments - -
Stockholders' Equity:
Preferred stock, $1 par value; authorized
2,000,000 shares; issued and outstanding: none
Common stock, $1 par value; authorized 60,000,000
shares; issued and outstanding: 22,319,131 in
1998 and 22,213,131 in 1997 22,319 22,213
Capital in excess of par value 8,160 2,731
Treasury stock (34,000 shares) (438) -
Accumulated other comprehensive income (loss) (Note 6) (577) 71
Retained earnings 36,505 54,680
- --------------------------------------------------------------------------------------------
Total Stockholders' Equity 65,969 79,695
- --------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 78,594 $ 96,219
============================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 3
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three months ended Nine months ended
Sept. 25, Sept. 26, Sept. 25, Sept. 26,
(in thousands except per share data) 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $18,550 $42,508 $75,750 $116,356
- ------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Cost of sales 12,602 22,159 45,145 60,957
Research and development 2,112 2,751 8,201 8,212
Selling, general and administrative 6,101 8,046 20,175 22,857
Merger, restructuring and other costs (Notes 7 and 8) 2,500 - 6,046 -
- ------------------------------------------------------------------------------------------------------------------------
23,315 32,956 79,567 92,026
- ------------------------------------------------------------------------------------------------------------------------
Operating income (loss) (4,765) 9,552 (3,817) 24,330
Joint venture income 233 426 824 1,341
Interest income 288 432 1,041 1,191
Other (18) (12) (47) (39)
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) before taxes (4,262) 10,398 (1,999) 26,823
Income taxes (Note 4) 831 (3,055) - (8,318)
- ------------------------------------------------------------------------------------------------------------------------
Net income (loss) $(3,431) $ 7,343 $(1,999) $ 18,505
========================================================================================================================
Net income (loss) per share:
Basic (Note 5) $ (0.15) $ 0.33 $ (0.09) $ 0.84
Diluted (Note 5) $ (0.15) $ 0.33 $ (0.09) $ 0.83
========================================================================================================================
Number of shares used in per share calculations:
Basic (Note 5) 22,250 22,151 22,227 22,139
Diluted (Note 5) 22,250 22,401 22,227 22,344
========================================================================================================================
*Share and per share data reflect a two-for-one stock split effective November
1997.
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 4
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Nine Months Ended
(in thousands) Sept. 25, 1998 Sept. 26, 1997
- ------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ (1,999) $ 18,505
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Amortization of stock incentive plans 861 215
Depreciation 2,933 2,733
Undistributed earnings of joint venture, other (568) (1,182)
Net change in operating assets and liabilities (A) 4,738 (2,413)
- ------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 5,965 17,858
- ------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (1,335) (3,665)
Purchase of investments (46,509) (3,520)
Proceeds from sale of investments 29,255 2,797
- ------------------------------------------------------------------------------------------------------
Net cash used by investing activities (18,589) (4,388)
- ------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Shares tendered for exercise of stock options (438) (311)
Net cash provided by employee stock plans 241 303
Cash dividends paid (13,545) (11,526)
- ------------------------------------------------------------------------------------------------------
Net cash used by financing activities (13,742) (11,534)
- ------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (26,366) 1,936
Cash and cash equivalents, at the beginning of the period 34,717 32,685
- ------------------------------------------------------------------------------------------------------
Cash and cash equivalents, at the end of the period $ 8,351 $ 34,621
======================================================================================================
(A) Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $ 7,310 $(10,659)
(Increase)/decrease in inventories 57 1,696
(Increase)/decrease in other current assets (532) (64)
Increase/(decrease) in accounts payable (1,114) 2,820
Increase/(decrease) in other accrued expenses (983) 3,794
- ------------------------------------------------------------------------------------------------------
Net change in operating assets and liabilities $ 4,738 $ (2,413)
======================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
Page 5
<PAGE>
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
In the opinion of the Company, the accompanying condensed consolidated financial
statements for the periods ended September 25, 1998, and September 26, 1997,
contain all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the financial position as of September 25, 1998, and
December 31, 1997, and the results of operations and cash flows for the periods
ended September 25, 1998, and September 26, 1997. In May 1998, the Company
completed the acquisition of Granville-Phillips Company (GPC). The acquisition
was accounted for as a pooling of interests under Accounting Principles Board
Opinion No. 16 (see Note 7). All prior period condensed consolidated financial
statements have been restated to include the financial position, results of
operations and cash flows of GPC as though it had been part of the Company for
all periods presented. Certain reclassifications have been made on the condensed
Consolidated Statements of Operations between Cost of sales and Selling, general
and administrative expenses for all periods presented to conform the accounting
policies of GPC to the Company's.
The results of operations for the nine-month period ended September 25, 1998,
are not necessarily indicative of the results expected for the full year.
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit of the nine-month periods ended September
25, 1998, and September 26, 1997, 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 and results of
operations. These condensed consolidated 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/A.
Note 2 - Short-Term Investments
At September 25, 1998 the Company had $20,692,000 of investments classified as
"available-for-sale" and $275,000 of investments classified as
"held-to-maturity" as defined by Statement of Financial Accounting Standard No.
115.
Note 3 - Inventories
- -----------------------------------------------------------------------
(in thousands) Sept. 25, 1998 Dec. 31, 1997
- -----------------------------------------------------------------------
Finished goods $ 3,392 $ 4,355
Work in process 7,821 7,367
Materials and parts 4,101 3,649
---------------------------------
Inventories $15,314 $15,371
=================================
Inventories are stated at the lower of cost or market on a first-in, first-out
basis.
Page 6
<PAGE>
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Income Taxes
The net federal, state and foreign income tax provisions was $0 for the
nine-month period ended September 25, 1998 and $8,318,000 for the nine-month
period ended September 26, 1997. 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, since these earnings are indefinitely reinvested.
The effective income tax rate for the nine-month periods ended September 25,
1998, and September 26, 1997, was 0% and 31%, respectively. The effective tax
benefit for the nine-month period was unfavorably impacted by the charges for
merger and other costs which are not fully deductible for tax purposes. The tax
rate in 1997 was less than the statutory rate because GPC was a Subchapter S
Corporation for federal income tax purposes. Accordingly, the income tax related
to GPC income was the responsibility of the individual shareholders of GPC.
The major components of deferred tax assets are compensation and benefit plans,
inventory valuation, 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 5 - Net Income Per Share
The Company has adopted Financial Accounting Standard No. 128, which specifies
the computation, presentation and disclosure of net income per share. Basic net
income per common share is based on the weighted average number of common shares
outstanding during the period. Diluted net income per common share reflects the
potential dilution that could occur if outstanding stock options were exercised.
All prior period net income per share figures have been restated.
Page 7
<PAGE>
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 (Cont'd.)
The following table sets forth the computation of basic and diluted net income
per common share:
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Nine Months Ended
(in thousands except per share data) Sept. 25, 1998 Sept. 26, 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income (loss) $(1,999) $ 18,505
==========================
Basic shares 22,227 22,139
Add: Common equivalent shares representing shares issuable upon conversion of
stock options (using the treasury stock method). Options outstanding not
included in the computation of diluted shares were 421 for 1998 because the
Company was in a net operating loss position, and the inclusion of such
shares would be anti-dilutive. No options were excluded for the 1997
computation. - 205
--------------------------
Diluted shares 22,227 22,344
==========================
Basic net income (loss) per share $ (0.09) $ 0.84
==========================
Diluted net income (loss) per share $ (0.09) $ 0.83
==========================
</TABLE>
Note 6 - Comprehensive Income
The Company has adopted Financial Accounting Standard No. 130 "Reporting
Comprehensive Income", which requires unrealized gains or losses on the
Company's investments and foreign currency translation adjustments, which prior
to adoption of the standard were reported separately in stockholders' equity, to
be included in other comprehensive income.
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
<CAPTION>
Nine Months Ended
(in thousands) Sept. 25, 1998 Sept. 26, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income (loss) $(1,999) $18,505
---------------------------
Other comprehensive income (loss) before tax
Foreign currency translation adjustment (954) (439)
Unrealized gain on available-for-sale investment 38 -
--------------------------
Other comprehensive income (loss), before tax (916) (439)
Income tax related to items of other comprehensive income 268 51
---------------------------
Other comprehensive income (loss), net of tax (648) (388)
---------------------------
Comprehensive income (loss) $(2,647) $18,117
===========================
</TABLE>
Page 8
<PAGE>
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Business Combination
On May 7, 1998, the Company acquired Granville-Phillips Company (GPC). GPC is a
Boulder, Colorado based company, which develops and manufactures instrumentation
for vacuum measurement and control. GPC's products are used principally in
semiconductor, flat panel display, and disk drive manufacturing processes. The
Company issued 2,382,925 shares of common stock for all of the common stock of
GPC. The business combination was accounted for as a pooling of interests.
Accordingly, all prior period consolidated financial statements have been
restated to include the financial position, results of operations and cash flows
of GPC as though it had been part of the Company for all periods presented.
The following information presents certain statement of operations data of the
Company and GPC for the periods prior to the acquisition:
- --------------------------------------------------------------------------------
Three months ended
(in thousands) March 27, 1998
- --------------------------------------------------------------------------------
Net sales for:
Helix Technology Corporation $25,872
Granville-Phillips Company 5,621
-------
Combined $31,493
=======
Net income (loss) for:
Helix Technology Corporation $ 2,941
Granville-Phillips Company (1,076)
-------
Combined $ 1,865
=======
GPC was an S Corporation for tax purposes prior to the acquisition. In
accordance with SAB topic 4B, the amount of undistributed earnings of $2.8
million generated during the periods that GPC was taxed as an S Corporation was
transferred from retained earnings to capital in excess of par value at the time
of the merger. The following pro forma information gives effect to adjustments
that provide for income taxes as if GPC was treated as a C Corporation for the
periods presented. The pro forma information is shown for comparative purposes
only.
PRO FORMA NET INCOME PER COMMON SHARE
- --------------------------------------------------------------------------------
Three months ended
(in thousands except per share data) March 27, 1998
- --------------------------------------------------------------------------------
Historical net income $1,865
Adjustment to income tax expense to
convert from S Corporation to
C Corporation status 296
------
Unaudited pro forma net income $2,161
======
Unaudited pro forma net income per common share:
Basic $ 0.10
Diluted $ 0.10
Page 9
<PAGE>
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Merger, Restructuring and Other Costs
In the third quarter of 1998, the Company recorded a pre-tax nonrecurring charge
of $2.5 million against results of operations associated with the restructuring
plan announced by the Company on September 2, 1998. The charge included
provisions for severance and benefits of $1.3 million resulting from reductions
of approximately 15% of the Company's workforce, costs of $1.0 million related
to closing a leased satellite facility and $.2 million for impairment of certain
assets. As of September 25, 1998, $.3 million was charged against accrued
restructuring costs for severance and benefit payments to former employees, and
the Company expects the balance to be paid by May 1999. Also, facilities expense
charged against accrued restructuring costs amounted to $.1 million, and the
Company expects to pay the balance through September 1999. The Company incurred
costs of $3.5 million during the first six months of 1998 in connection with the
acquisition of GPC. These costs consisted primarily of compensation expense for
stock incentive plans for certain GPC employees (which plans were discontinued
at the time of the merger) and fees for professional services.
Note 9 - New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" (SFAS 131). SFAS 131 requires public companies to report
segment information on the basis used internally to measure segment performance
in complete financial statements and in condensed interim financial statements
issued to stockholders. This segment information includes their products and
services, the geographic areas in which they operate and their major customers.
In February 1998, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 132 (SFAS 132), "Employers' Disclosures about Pensions
and Other Post Retirement Benefits". The Company will comply with the disclosure
requirements of these statements in its 1998 Annual Report to Shareholders.
In June 1998, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 133 (SFAS 133), "Accounting for Derivative Instruments
and Hedging Activities". The impact of adopting SFAS 133, which is effective for
the Company in 1999, has not been determined.
Page 10
<PAGE>
HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
On May 7, 1998, the Company acquired Granville-Phillips Company (GPC). GPC is a
world leader in the development and manufacture of instrumentation for vacuum
measurement and control used principally in the semiconductor, flat panel
display and disk drive manufacturing processes. The transaction was accounted
for as a pooling of interests; and accordingly, the financial results of the
Company for all periods presented include the financial position, results of
operations and cash flows of GPC.
Results of Operations
Net sales for the quarter were $18.6 million compared with $42.5 million a year
ago, a decrease of 56%. Net sales for the nine-month period were $75.8 million
compared with $116.4 million for the nine-month period of 1997, a decrease of
35%. This decline in sales is a result of the slowdown in the global market for
semiconductor capital equipment primarily due to the current economic conditions
in the Pacific Rim and over capacity in the memory chip market.
Gross profit percentage for the quarter was 32.1% compared with 47.9% for the
third quarter of 1997. Gross profit percentage for the first nine months of 1998
was 40.4% versus 47.6% for the first nine months of 1997. The decreases are
primarily due to the lower sales volume.
Research and development expenditures of $2.1 million for the quarter were $.6
million lower than the same period last year, while year-to-date spending was
$8.2 million, which was essentially the same as the same period last year. The
Company continues to develop new products to meet the vacuum system needs of
companies in the semiconductor, disk drive and flat panel display industries.
Total Selling, general and administrative expense decreased by $1.9 million in
the third quarter and $2.7 million for the first nine months compared to the
same periods in 1997, primarily due to the lower variable compensation expense
and selling costs.
On September 2, 1998, the Company announced a restructuring plan to align its
human and capital resources with the Company's strategy of expanding its global
support services business. The Company recorded a pre-tax nonrecurring charge of
$2.5 million against results of operations in the third quarter of 1998
associated with the plan. The charge included provisions for severance and
benefits of $1.3 million resulting from reductions of approximately 15% of the
Company's workforce, costs of $1.0 million related to closing a leased satellite
facility and $.2 million for impairment of certain assets. As of September 25,
1998, $.3 million was charged against accrued restructuring costs for severance
and benefit payments to former employees, and the Company expects the balance to
be paid by May 1999. Also, facilities expense charged against accrued
restructuring costs amounted to $.1 million, and the Company expects to pay the
balance through September 1999. The Company incurred costs of $3.5 million
during the first six months of 1998 in connection with the acquisition of GPC.
These costs consisted primarily of compensation expense for stock incentive
plans for certain GPC employees (which plans were discontinued at the time of
the merger) and fees for professional services.
Operating income in the third quarter of 1998 decreased $14.3 million compared
with the third quarter of 1997. Operating income for the first nine months of
1998 decreased by $28.1 million compared with the same period a year ago. The
decrease in operating income was due to lower revenue levels and merger,
restructuring and other costs.
Page 11
<PAGE>
HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Results of Operations (Continued)
Income from the Company's joint venture in Japan declined $.2 million for the
third quarter of 1998 compared with the third quarter of 1997. Joint venture
income declined $.5 million for the first nine months of 1998 compared with the
same period last year.
For the third quarter of 1998, the Company had a pretax loss of $4.3 million
resulting in a tax benefit of $.8 million compared to pretax income of $10.4
million and a provision of $3.1 million for the same period a year ago. The
Company's provision for income taxes was $0 and $8.3 million for the first nine
months of 1998 and 1997, respectively. The effective tax rate for the nine-month
periods ended September 25, 1998, and September 26, 1997, was 0% and 31.0%,
respectively. The effective tax benefit for the nine-month period was
unfavorably impacted by the charges for merger and other costs which are not
fully deductible for tax purposes. The tax rate in 1997 was less than the
statutory rate because GPC was a Subchapter S Corporation for federal income tax
purposes.
Liquidity and Capital Resources
Cash provided by operating activities for the first nine months of 1998 was $6.0
million compared with $17.9 million for the comparable period last year due to
lower sales volume.
Cash used by investing activities increased by $14.2 million during the first
nine months of 1998 compared with the same period last year. The increase was
primarily due to the purchase of available-for-sale investments comprised
primarily of short-term tax exempt securities.
The Company's informal bank money market lines of credit amount to $12.0
million. There were no borrowings under these agreements during 1998 or 1997.
Cash dividends paid to stockholders during the first nine months of 1998 were
$13.5 million compared with $11.5 million during the first nine months of 1997.
On October 22, 1998, the Board of Directors voted to reduce the quarterly cash
dividend from $.21 per share to $.12 per share.
The Company manages its foreign exchange rate risk arising from intercompany
foreign currency denominated transactions through the use of foreign currency
forward contracts. The gains and losses on these transactions are not material.
The Company believes that existing cash and investment balances and funds
available under existing credit lines will be adequate to fund operations
through 1998 and that it has opportunities to consider further financing options
should additional funds be required.
Page 12
<PAGE>
HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Year 2000
The Company has established a project team to work with our major customers and
suppliers regarding their abilities to meet the Year 2000 requirements.
Specifically, we have sent questionnaires to our suppliers regarding their Year
2000 programs, and we have received similar correspondence from our customers.
These programs are in process, and to date the Company is unaware of any
possible negative impact from these third parties concerning their abilities to
be ready for the Year 2000.
Certain of the Company's internal computer systems are not Year 2000 ready
(i.e., such systems use only two digits to represent the year in date data
fields and, consequently, may not accurately distinguish between the 20th and
21st centuries or may not function properly at the turn of the century). The
Company has been taking actions intended to either correct such systems or
replace them with Year 2000 ready systems. The Company expects to implement
successfully the systems and programming changes necessary to address Year 2000
issues and does not believe that the cost of such actions will have a material
effect on the Company's results of operations or financial condition.
New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" (SFAS 131). SFAS 131 requires public companies to report
segment information on the basis used internally to measure segment performance
in complete financial statements and in condensed interim financials issued to
stockholders. This segment information includes their products and services, the
geographic areas in which they operate and their major customers. In February
1998, the Financial Accounting Standards Board issued Financial Accounting
Standard No. 132 (SFAS 132), "Employers' Disclosures about Pensions and Other
Post Retirement Benefits". The Company will comply with the disclosure
requirements of all of these statements in the 1998 Annual Report to
Shareholders.
In June 1998, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 133 (SFAS 133), "Accounting for Derivative Instruments
and Hedging Activities". The impact of adopting SFAS 133, which is effective for
the Company in 1999, has not been determined.
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 results will be impacted significantly by 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.
Page 13
<PAGE>
HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Forward-Looking Statements
This Form 10-Q, 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.
Page 14
<PAGE>
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).
27.1 Financial Data Schedule (EDGAR version only)
27.2 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 25, 1998.
Page 15
<PAGE>
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)
November 6, 1998 By: /s/Michael El-Hillow
- --------------------- ---------------------------------
Date Michael El-Hillow
Senior Vice President and
Chief Financial Officer
Page 16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-25-1998
<CASH> 8,351
<SECURITIES> 20,967
<RECEIVABLES> 11,100
<ALLOWANCES> (225)
<INVENTORY> 15,314
<CURRENT-ASSETS> 61,392
<PP&E> 35,492
<DEPRECIATION> (24,947)
<TOTAL-ASSETS> 78,594
<CURRENT-LIABILITIES> 12,625
<BONDS> 0
0
0
<COMMON> 22,319
<OTHER-SE> 43,650
<TOTAL-LIABILITY-AND-EQUITY> 78,594
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