<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 1998
HELIX TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-6866 04-2423640
(Commission File No.) (I.R.S. 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
N.A.
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
INFORMATION TO BE INCLUDED IN THE REPORT
THIS REPORT ON FORM 8-K/A AMENDS THE REGISTRANT'S REPORT ON FORM 8-K DATED MAY
7, 1998, WHICH WAS FILED ON MAY 15, 1998 TO INCLUDE THE FINANCIAL STATEMENTS AND
PRO FORMA FINANCIAL INFORMATION REQUIRED BY ITEM 7 OF FORM 8-K.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED:
Independent Auditors' Report
Balance Sheets of Granville-Phillips Company as of
December 31, 1997 and 1996, and March 31, 1998
Statements of Income of Granville-Phillips Company for the Years Ended
December 31, 1997, 1996 and 1995 and the Three Months Ended
March 31, 1998 and 1997
Statements of Shareholders' Investment of Granville-Phillips Company for
the Years Ended December 31, 1997, 1996 and 1995 and the Three
Months Ended March 31, 1998
Statements of Cash Flows of Granville-Phillips
Company for the Years Ended December 31, 1997, 1996 and 1995 and
the Three Months Ended March 31, 1998 and 1997
Notes to Financial Statements of Granville-Phillips Company
(b) PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Combined Balance Sheet
as of March 27, 1998
Unaudited Pro Forma Combined Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995 and the Three Months Ended March,
1998 and 1997
Unaudited Notes to Pro Forma Financial Statements
(c) EXHIBITS
Page Number(s) or
Incorporation by
Description Reference to
2.1 Agreement and Plan of Merger dated Exhibit 2.1 to the
as of April 16, 1998 among Helix Company's Form 8-K
Technology Corporation, Helix filed May 15, 1998.
Acquisition Corporation, Granville-
Phillips Company and certain principal
stockholders of Granville-Phillips
Company.
2.2 Registration Rights Agreement dated Exhibit 2.2 to the
May 7, 1998. Company's Form 8-K
filed May 15, 1998.
Exhibit 2.3 to the
2.3 Escrow Agreement dated May 7, 1998. Company's Form 8-K
filed May 15, 1998.
23 Consent of Arthur Andersen LLP
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
Granville-Phillips Company:
We have audited the accompanying balance sheets of GRANVILLE-PHILLIPS COMPANY (a
Washington S corporation) as of December 31, 1997 and 1996, and the related
statements of income, shareholders' investment and cash flows for each of the
years in the three-year period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Granville-Phillips Company as
of December 31, 1997 and 1996, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 1997, in
conformity with generally accepted accounting principles.
/s/Arthur Andersen LLP
Denver, Colorado,
February 18, 1998 (except for
the matter discussed in Note 10,
as to which the date is May 7, 1998).
<PAGE>
<TABLE>
GRANVILLE-PHILLIPS COMPANY
BALANCE SHEETS
AS OF DECEMBER 31, 1997 AND 1996 AND MARCH 31, 1998
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
(Unaudited)
December 31, March 31,
(in thousands except per share data) 1997 1996 1998
- ------------------------------------------------------------------------------------------------------------------------
ASSETS
Current Assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 1,357 $ 858 $ 1,354
Short-term cash investments, at cost which
approximates market 3,675 2,700 3,818
Accounts receivable, less allowance
for doubtful accounts of $90 2,814 1,789 2,302
Inventory, net 4,084 3,485 4,441
Prepaid expenses and other 42 60 124
- ------------------------------------------------------------------------------------------------------------------------
Total Current Assets 11,972 8,892 12,039
- ------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost 7,158 6,428 7,433
Less: accumulated depreciation (4,739) (4,202) (4,869)
- ------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 2,419 2,226 2,564
Patents, net of accumulated amortization 162 128 104
========================================================================================================================
TOTAL ASSETS $14,553 $11,246 $14,707
========================================================================================================================
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Accounts payable $ 341 $ 189 $ 327
Dividends payable 153 134 -
Accrued liabilities 1,102 1,038 1,957
Income taxes payable (Note 3) 52 46 226
- ------------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 1,648 1,407 2,510
- ------------------------------------------------------------------------------------------------------------------------
Noncurrent income taxes payable (Note 3) 39 47 39
Noncurrent liability (Note 4) 217 146 -
Commitments and contingencies (Note 5) - - -
Shareholders' investment (Notes 6, 7 and 8):
Common stock, authorized 1,000,000
shares; 110,689 at December 31, 1997 and
March 31, 1998, and 107,289 at
December 31, 1996 Series A - voting,
no par value shares issued and outstanding 3,506 2,940 7,753
664,134 Series B - non-voting, no par value
shares issued and outstanding at
December 31, 1997 and March 31, 1998 664 - 664
Retained earnings 9,432 7,591 8,356
Unamortized amount for stock issued under stock
incentive plans (953) (885) (4,615)
- ------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Investment 12,649 9,646 12,158
========================================================================================================================
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $14,553 $11,246 $14,707
========================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
GRANVILLE-PHILLIPS COMPANY
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
AND THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (Unaudited)
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
(Unaudited)
For the years ended For the three months ended
December 31, March 31,
(in thousands) 1997 1996 1995 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $25,558 $23,282 $21,703 $ 5,621 $5,386
- ---------------------------------------------------------------------------------------------------------------
Costs and expenses:
Cost of sales 11,588 10,811 9,941 2,842 2,526
Research and development 2,642 2,545 1,946 634 583
Selling, general and administrative 7,228 6,851 6,098 3,114 1,544
- ---------------------------------------------------------------------------------------------------------------
21,458 20,207 17,985 6,590 4,653
- ---------------------------------------------------------------------------------------------------------------
Operating income (loss) 4,100 3,075 3,718 (969) 733
Interest income 209 169 90 38 22
Other, net 18 38 9 - -
- ---------------------------------------------------------------------------------------------------------------
Income (loss) before taxes 4,327 3,282 3,817 (931) 755
Income taxes - (Note 3) -- State
tax provision (98) (113) (108) (145) (25)
- ---------------------------------------------------------------------------------------------------------------
Net income (loss) $ 4,229 $ 3,169 $ 3,709 $(1,076) $ 730
===============================================================================================================
Pro forma information (unaudited):
Income (loss) before taxes $ 4,327 $ 3,282 $ 3,817 $ (931) $ 755
Income tax provision (1,719) (1,300) (1,480) 151 (306)
- ---------------------------------------------------------------------------------------------------------------
Net income (loss) $ 2,608 $ 1,982 $ 2,337 $ (780) $ 449
===============================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
GRANVILLE-PHILLIPS COMPANY
STATEMENTS OF SHAREHOLDERS' INVESTMENT
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 AND
THE THREE MONTH PERIOD ENDED MARCH 31, 1998
(in thousands)
<CAPTION>
Unamortized
Amount for
Stock Issued
Voting Non-Voting Under Stock
Common Stock Common Stock Incentive Retained
Shares Amount Shares Amount Plans Earnings
<S> <C> <C> <C> <C> <C> <C>
BALANCES, December 31, 1994 103 $1,626 - $ - $ (260) $ 4,967
Net income - - - - - 3,709
Stock incentive plans (Note 6) -
Common stock issued 3 296 - - (296) -
Increase in estimated value
of shares - 169 - - (169) -
Amortization - - - - 217 -
Stock repurchase (3) - - - - (280)
Dividends - cash - - - - - (1,244)
--- ------ --- ---- ------- -------
BALANCES, December 31, 1995 103 2,091 - - (508) 7,152
Net income - - - - - 3,169
Stock incentive plans (Note 6) -
Common stock issued 3 432 - - (432) -
Increase in estimated value
of shares - 297 - - (297) -
Amortization - - - - 352 -
Common stock issued for services 1 120 - - - -
Dividends - cash - - - - - (2,730)
--- ------ --- ---- ------- -------
BALANCES, December 31, 1996 107 2,940 - - (885) 7,591
Net income - - - - - 4,229
Stock incentive plans (Note 6) -
Common stock issued 4 442 - - (442) -
Increase in estimated value
of shares - 124 - - (124) -
Amortization - - - - 498 -
Dividends -
Cash - - - - - (1,724)
Stock - - 664 664 - (664)
--- ------ --- ---- ------- -------
BALANCES, December 31, 1997 111 3,506 664 664 (953) 9,432
Net loss (unaudited) - - - - - (1,076)
Stock incentive plans
(Note 6) - (unaudited)
Increase in estimated value
of shares - 4,247 - - (4,247) -
Amortization - - - - 585 -
--- ------ --- ---- ------- -------
BALANCES, March 31, 1998
(unaudited) 111 $7,753 664 $664 $(4,615) $ 8,356
=== ====== === ==== ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
GRANVILLE-PHILLIPS COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
(in thousands) 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $ 4,229 $ 3,169 $ 3,709
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 547 547 520
Gain on sale of assets - (1) (1)
Amortization of stock incentive plans 498 352 217
Stock issued for services - 120 -
Other 71 83 75
Net change in operating assets and liabilities (A) (1,392) (241) (874)
- ----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 3,953 4,029 3,646
- ----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (730) (671) (539)
Purchase of short-term cash investments (4,445) (4,277) (3,676)
Proceeds from sale of short-term cash investments 3,470 3,704 2,205
Proceeds from sale of assets - 1 2
Purchase of patents (44) (31) (18)
- ----------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (1,749) (1,274) (2,026)
- ----------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Cash paid for repurchase of stock - - (280)
Dividends paid (1,705) (2,713) (1,234)
- ----------------------------------------------------------------------------------------------------------------
Net cash used by financing activities (1,705) (2,713) (1,514)
- ----------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 499 42 106
Cash and cash equivalents, at the beginning of the period 858 816 710
================================================================================================================
Cash and cash equivalents, at the end of the period $ 1,357 $ 858 $ 816
================================================================================================================
(A) Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $(1,025) $ 665 $ (380)
(Increase)/decrease in inventories, net (599) (699) (672)
(Increase)/decrease in prepaid expenses and other 18 (7) 4
Increase/(decrease) in accounts payable
and accrued liabilities 216 (149) 148
Increase/(decrease) in income taxes payable (2) (51) 26
================================================================================================================
Net change in operating assets and liabilities $(1,392) $ (241) $ (874)
================================================================================================================
Supplemental disclosure of non-cash financing activities:
Common stock issued under stock incentive plans $ 442 $ 432 $ 296
================================================================================================================
Stock dividend declared $ 664 $ - $ -
================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
GRANVILLE-PHILLIPS COMPANY
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------
<CAPTION>
(in thousands) 1998 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $(1,076) $ 730
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 209 70
Gain on sale of assets - 136
Amortization of stock incentive plans 585 -
Net change in operating assets and liabilities (A) 871 (473)
- ---------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 589 463
- ---------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (275) (134)
Purchase of short-term cash investments (1,775) (770)
Proceeds from sale of short-term cash investments 1,632 1,018
Purchase of patents (21) -
- ---------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (439) 114
- ---------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Dividends paid (153) (134)
- ---------------------------------------------------------------------------------------------------------------
Net cash used by financing activities (153) (134)
- ---------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents (3) 443
Cash and cash equivalents, at the beginning of the period 1,357 858
===============================================================================================================
Cash and cash equivalents, at the end of the period $ 1,354 $1,301
===============================================================================================================
(A) Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $ 512 $ (690)
(Increase)/decrease in inventories, net (357) 211
(Increase)/decrease in prepaid expenses and other (82) 8
Increase/(decrease) in accounts payable
and accrued liabilities 624 (2)
Increase/(decrease) in income taxes payable 174 -
===============================================================================================================
Net change in operating assets and liabilities $ 871 $ (473)
===============================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 AND 1995 AND MARCH 31, 1998 (Unaudited)
(Monetary Amounts Stated in Thousands Except Per Share Amounts)
1. ORGANIZATION
Granville-Phillips Company (the "Company") designs, manufactures and sells
vacuum pressure measurement and flow control instrumentation to foreign and
domestic distributors and end-users.
Interim Financial Information
The interim financial statements have been prepared by the Company pursuant to
the interim reporting rules and regulations of the Securities and Exchange
Commission ("SEC"). Certain information and disclosures normally accompanying
financial statements prepared in accordance with generally accepted accounting
principles ("GAAP") have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the interim financial statements
include all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the information set forth therein. Results for the
interim period are not necessarily indicative of the results to be expected for
the entire year.
2. SIGNIFICANT ACCOUNTING POLICIES
Short-Term Investments
The Company has short-term investments classified as "held-to-maturity" as
defined by Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." At December 31, 1997 and
1996, and March 31, 1998, these investments are carried at a cost of
approximately $3,675, and $2,700 and $3,818, respectively, which approximates
market value, and consists of treasury bills which have an original maturity of
longer than three months. Unrealized gains for these securities for the years
ended December 31, 1997, 1996 and 1995, and quarter ended March 31, 1998 were
immaterial.
Inventory
Inventory is valued at the lower of cost (last-in, first-out ("LIFO")) or
market. The inventory balances were as follows:
(Unaudited)
December 31, March 31,
1997 1996 1998
Raw materials and work in
process (FIFO) $3,793 $3,335 $4,046
Finished goods (FIFO) 509 348 615
------ ------ ------
4,302 3,683 4,661
Less-LIFO reserve (218) (198) (220)
------ ------ ------
$4,084 $3,485 $4,441
====== ====== ======
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. Additions, improvements and
betterments are capitalized when incurred. Maintenance and repairs are charged
to operations as the costs are incurred. The Company computes depreciation using
the straight-line method over the following estimated useful lives beginning
when the asset is placed in service:
Building and improvements 10-50 years
Equipment 3-15 years
Furniture, fixtures and computer equipment 5-15 years
Depreciation expense for the years ended December 31, 1997, 1996 and 1995 was
approximately $538, $539 and $513, respectively.
Accrued Liabilities
Accrued liabilities consist of the following as of December 31, 1997 and 1996
and March 31, 1998.
(Unaudited)
December 31, March 31,
1997 1996 1998
Accrued salaries and benefits $ 649 $ 605 $1,003
Accrued vacation 291 281 300
Accrued property taxes 85 83 65
Other accrued expenses 77 69 589
---------------------------------------
$1,102 $1,038 $1,957
=======================================
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Patents
Patent costs consist primarily of legal and filing fees associated with the
patent registration. These costs are amortized over the expected useful life of
the issued patent, up to 17 years. The Company's current patents expire between
2004 and 2016; however, expiration of any single patent is not expected to have
a material adverse effect on the Company or its operations.
Revenue Recognition
The company recognizes revenue when title and risk of ownership passes to the
customer which generally, as to shipments with FOB destination terms, is upon
receipt by the customer and, for shipments with FOB shipping point terms, is
upon departure from the Company's dock.
Research and Development Expenditures
Expenditures for research and development are expensed when incurred. The
Company incurred approximately $2,642, $2,545 and $1,946 of research and
development costs during the years ended December 31, 1997, 1996, and 1995,
respectively. For the three-month periods ended March 31, 1998 and 1997, the
Company incurred approximately $634 and $583, respectively, of research and
development costs.
Statements of Cash Flows
For purposes of the statements of cash flows, the Company considers all highly
liquid investments purchased with an original maturity of three months or less
to be cash equivalents.
Income Taxes
The Company has elected to be treated as an S corporation for income tax
purposes. The federal and state income taxes related to S corporation income are
the responsibility of the individual shareholders of the Company. In certain
states, the Company has not elected S corporation status for tax reporting
purposes and, therefore, in those states the state income taxes are the
responsibility of the Company (see Note 3).
The unaudited pro forma income tax provision and related information presented
on the statements of income reflects a provision for taxes as if the company had
been a tax paying corporation for all periods presented.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
Evaluation of Long-Lived Assets
In accordance with Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," the Company evaluates the potential impairment of long-lived
assets based upon projections of undiscounted cash flows whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be fully recoverable. If deemed impaired, the assets are written down to their
fair value. Management believes there has been no impairment of the Company's
long-lived assets at December 31, 1997.
Reclassifications
Certain prior period balances have been reclassified to conform with current
period presentation.
New Accounting Pronouncements
The Financial Accounting Standards Board (FASB) recently issued SFAS Nos. 130
"Reporting Comprehensive Income" (SFAS No. 130) and 131, "Disclosures about
Segments of an Enterprise and Related Information" (SFAS No. 131). SFAS No. 130
requires the presentation of "Other Comprehensive Income", as defined, and is
effective for fiscal years beginning after December 15, 1997. The Company has no
other comprehensive income. SFAS No. 131 establishes standards for the way
public business enterprises report information about operating segments and the
related disclosures about products and services, geographic areas and major
customers. Adoption of SFAS No. 131 will not have a material effect on the
corporation's presentation of operating segments and related disclosures. SFAS
131 is effective for financial statements issued for fiscal years beginning
after December 15, 1997.
3. INCOME TAXES
As a result of the Company's status as an S corporation, federal and state
income taxes related to the S corporation income are the responsibility of the
individual shareholders of the Company. The total amount of the Company's tax
basis in its assets exceeded the amount for book purposes by approximately $100
at December 31, 1997, and certain liabilities for book purposes exceeded the
amounts recognized for tax purposes by approximately $500 at December 31, 1997.
As a result of the change to an S corporation effective April 1, 1994, the
previously deferred income taxes of $79 on certain items, remain a liability of
the Company and are payable ratably over a ten-year period. During each of the
years ended December 31, 1997, 1996 and 1995, the Company made payments related
to this liability of approximately $8. The Company has a remaining income tax
liability of approximately $47 related to these taxes of which $8 is reflected
as a current liability in the accompanying December 31, 1997 balance sheet.
The provision for income taxes consists of state taxes currently payable of
approximately $98, $113 and $108 for the years ended December 31, 1997, 1996 and
1995, respectively. The Company had made estimated state income tax payments of
approximately $59, $81 and $60 prior to December 31, 1997, 1996 and 1995,
respectively.
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
4. BENEFIT PLANS
Retirement Savings Plan
The Company has a defined contribution plan under Section 401(K) of the Internal
Revenue Code. The plan covers full-time employees based on a minimum age of 21
and a minimum service of one year. The Company may make discretionary
contributions to the plan, but is not required to match any employee
contributions. The Company made discretionary contributions of $355, $340 and
$300 during the years ended December 31, 1997, 1996 and 1995, respectively.
Amounts withheld from employees but not paid to the plan at December 31, 1997
and 1996 were approximately $43 and $40, respectively, and are included in
accrued liabilities in the accompanying balance sheets.
Performance Share Plans
The Company has established several performance share plans for certain key
employees. The benefits from the plans, if any, will be paid to the employees in
cash and will be based on the current market value, as defined, of the
employee's vested shares on the date of payment. The benefits payable to the
employees vest pursuant to a formula based on operating results through December
31, 2001. In the event an employee leaves the Company for any reason, other than
a leave of absence approved by the Company, prior to vesting, their performance
share benefit shall be canceled and forfeited without payment by the Company.
The benefits of the plans will be paid to the employees on March 31, 2004,
December 31, 2005, December 31, 2006 and December 31, 2007, or earlier upon
certain triggering events defined in the agreement. In the event that a majority
of the Company's voting stock or assets are sold (see Note 10), the employee's
performance share benefit will fully vest and the employee will be paid the
value of the shares at the time of sale. The Company, using current market value
of the shares, recorded an expense of approximately $71, $83 and $36 for the
years ended December 31, 1997, 1996 and 1995, respectively, and a liability of
$217 and $146 as of December 31, 1997 and 1996, respectively, related to the
plans. For the three-month periods ended March 31, 1998 and 1997, the Company
recorded an expense of $748 and $19, respectively, related to the plans. The
related liability as of March 31, 1998 and 1997 was $965 and $150, respectively.
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
5. COMMITMENTS AND CONTINGENCIES
The Company leases manufacturing space and equipment under noncancelable
operating leases. The approximate future minimum payments under these operating
leases, which expire on various dates through December 31, 2000, are as follows:
Year ending December 31
1998 $243
1999 208
2000 100
2001 -
Thereafter -
----
$551
Total rent expense related to these leases of approximately $181, $141 and $107
in 1997, 1996 and 1995, respectively, is included in operating expenses.
6. STOCK INCENTIVE PLANS
The Company has issued shares of common stock to certain key employees under
various stock incentive plans. The shares vest pursuant to a formula based on
operating results. In addition, the Company has the option to acquire, at no
cost, all of the shares held by these employees if they terminate prior to the
date the shares vest. During the years ended December 31, 1997, 1996 and 1995,
no shares of stock previously granted were forfeited.
Total compensation for the vesting period of the plan is recorded in the
financial statements in the year the plan is adopted by a credit to common
stock. Estimated compensation is changed annually based on the change in the
estimated value of the Company's common stock. The amount expensed each year is
the pro rata portion of total compensation for the remaining vesting period
based on performance achieved to date. The amount expensed for 1997, 1996 and
1995, respectively, was approximately $498, $352 and $217. For the three-month
periods ended March 31, 1998 and 1997, the amount expensed was approximately
$585 and $49, respectively. The unamortized compensation amount is reflected as
an offset to shareholders' investment. The Company's accounting, as described
above, for its stock based incentive compensation plans is consistent with the
methods prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees."
<PAGE>
GRANVILLE-PHILLIPS COMPANY
NOTES TO FINANCIAL STATEMENTS
(Continued)
6. STOCK INCENTIVE PLANS (Continued)
At December 31, 1997, there were 13,700 shares issued and outstanding that vest
through December 31, 2001. At issue date, the estimated value of these shares
was approximately $1,384. At December 31, 1997 and at March 31, 1998, the
estimated value was approximately $1,781 and $6,028, respectively. For each
incentive plan transaction, the Board of Directors ratifies a per share value
according to an independent appraisal. The estimated fair values at issue date
are computed by multiplying the specific year's per share value times the number
of shares issued under each plan.
Number of Shares Issue Date Estimated Fair Value
Increases during -
1995 3,400 $296
1996 3,600 $432
1997 3,400 $442
7. COMMON STOCK
During 1997, the Company's shareholders approved an increase in the number of
authorized common shares to 1,000,000 and the Board of Directors approved the
issuance of 664,134 shares of Series B, non-voting common stock as a stock
dividend to all existing shareholders. The shareholders also approved a transfer
of $1 per share for the stock dividend from retained earnings to capital stock.
8. RETIREMENT OF STOCK
The state of Washington, under whose laws the Company is incorporated, requires
the retirement of stock to be charged to retained earnings as a restriction on
dividends.
9. MAJOR CUSTOMER
Revenue in 1997, 1996 and 1995, from Applied Materials, a leading manufacturer
of semiconductor capital equipment, accounted for approximately 32%, 29% and 29%
of Company revenues, respectively, and 21% of the total trade accounts
receivable at December 31, 1997 and 1996.
10. SUBSEQUENT EVENT
In a transaction which closed on May 7, 1998, all of the outstanding stock of
the Company was exchanged for shares in Helix Technology Corporation.
<PAGE>
HELIX TECHNOLOGY CORPORATION
AND
GRANVILLE-PHILLIPS COMPANY
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
BASIS OF PRESENTATION
The following unaudited pro forma combined financial statements give effect to
the merger of Helix Technology Corporation ("Helix" or "Company") and
Granville-Phillips Company ("GPC) under the pooling-of-interests method of
accounting. The unaudited pro forma combined financial statements are based on
the historical consolidated financial statements and notes thereto (as
applicable) of Helix and the historical financial statements and notes thereto
(as applicable) of GPC, which are included elsewhere herein.
The unaudited pro forma combined balance sheet assumes that the merger took
place on March 27, 1998, and combines Helix's March 27, 1998, consolidated
balance sheet with GPC's March 31, 1998, balance sheet. The unaudited pro forma
combined statements of operations assume that the merger took place on January
1, 1995, and combines Helix's consolidated statements of operations with GPC's
statements of operations for the fiscal years ended December 31, 1997, 1996 and
1995 and the three months ended March 27, 1998 and March 28, 1997 for Helix and
March 31, 1998 and 1997 for GPC.
The unaudited pro forma financial information does not purport to represent what
the Company's financial position or results of operations would actually have
been had the transactions in fact occurred on the dates indicated above, nor to
project the Company's financial position or results of operations for any future
date or period. The pro forma financial information should be read in
conjunction with the accompanying notes and the consolidated financial
statements included in the Company's 1997 Annual Report on Form 10-K/A and
Quarterly Report on Form 10-Q for the quarter ended March 27, 1998.
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
PRO FORMA COMBINED BALANCE SHEET (Unaudited)
AS OF MARCH 27, 1998
<CAPTION>
Historical Pro Forma
(in thousands except per share data) Helix GPC Adjustments Combined
- --------------------------------------------------------------------------------------------------------------------
ASSETS
Current:
<S> <C> <C> <C> <C>
Cash $ 8,458 $ 1,354 $ 9,812
Investments 25,211 3,818 29,029
Receivables 14,647 2,302 16,949
Inventories 11,963 4,441 16,404
Deferred income taxes 4,215 - $ 695 4,910
Other current assets 1,101 124 1,225
------- ------- ------- -------
Total Current Assets 65,595 12,039 695 78,329
------- ------- ------- -------
Property, plant and equipment 27,628 7,433 35,061
Less: accumulated depreciation (18,190) (4,869) (23,059)
------- ------- -------
Net property, plant and equipment 9,438 2,564 12,002
------- ------- -------
Other assets 6,590 104 6,694
------- ------- -------
TOTAL ASSETS $81,623 $14,707 $ 695 $97,025
======== ======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 5,764 $ 327 $ 6,091
Payroll and compensation 1,864 505 2,369
Retirement costs 3,176 655 3,831
Income taxes 3,159 265 3,424
Other accrued liabilities 504 797 $ 2,225 3,526
------- ------- ------- -------
Total current liabilities 14,467 2,549 2,225 19,241
------- ------- ------- -------
Stockholders' Equity
Common stock 19,832 8,417 (6,134) 22,115
Unamortized amount for stock incentive plans - (4,615) 184 (4,431)
Capital in excess of par 3,582 - 10,043 13,625
Currency translation adjustment (283) - (283)
Retained earnings 44,025 8,356 (5,623) 46,758
------- ------- ------- -------
Total Stockholders' Equity 67,156 12,158 (1,530) 77,784
------- ------- ------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $81,623 $14,707 $ 695 $97,025
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS (Unaudited)
FOR THE YEAR ENDED DECEMBER 31, 1997
<CAPTION>
Historical Pro Forma
(in thousands except per share data) Helix GPC Adjustments Combined
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $131,519 $25,558 $157,077
-------------------------------------------------------
Costs and expenses:
Cost of sales 69,210 11,588 80,798
Research and development 8,899 2,642 11,541
Selling, general and administrative 24,189 7,228 31,417
-------------------------------------------------------
102,298 21,458 123,756
-------------------------------------------------------
Operating income 29,221 4,100 33,321
Other income 3,271 227 3,498
-------------------------------------------------------
Income before taxes 32,492 4,327 36,819
Income taxes (11,177) (98) $(1,621) (12,896)
-------------------------------------------------------
Net income $ 21,315 $ 4,229 $(1,621) $ 23,923
=======================================================
Net income per share:
Basic $ 1.08 $ 1.08
Diluted $ 1.07 $ 1.07
=======================================================
Number of shares used in per share calculations:
Basic 19,768 2,310 22,078
Diluted 19,970 2,310 22,280
=======================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS (Unaudited)
FOR THE YEAR ENDED DECEMBER 31, 1996
<CAPTION>
Historical Pro Forma
(in thousands except per share data) Helix GPC Adjustments Combined
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $128,383 $23,282 $151,665
-----------------------------------------------------
Costs and expenses:
Cost of sales 68,081 10,811 78,892
Research and development 7,668 2,545 10,213
Selling, general and administrative 20,922 6,851 27,773
--------------------------------------------------------
96,671 20,207 116,878
--------------------------------------------------------
Operating income 31,712 3,075 34,787
Other income 2,730 207 2,937
--------------------------------------------------------
Income before taxes 34,442 3,282 37,724
Income taxes (12,485) (113) $(1,187) (13,785)
-------------------------------------------------------
Net income $ 21,957 $ 3,169 $(1,187) $ 23,939
========================================================
Net income per share:
Basic $ 1.12 $ 1.10
Diluted $ 1.10 $ 1.08
========================================================
Number of shares used in per share calculations:
Basic 19,670 2,118 21,788
Diluted 19,978 2,118 22,096
========================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS (Unaudited)
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Historical Pro Forma
(in thousands except per share data) Helix GPC Adjustments Combined
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $123,667 $21,703 $145,370
-------------------------------------------------------
Costs and expenses:
Cost of sales 67,740 9,941 77,681
Research and development 4,534 1,946 6,480
Selling, general and administrative 19,588 6,098 25,686
-------------------------------------------------------
91,862 17,985 109,847
-------------------------------------------------------
Operating income 31,805 3,718 35,523
Other income 1,909 99 2,008
-------------------------------------------------------
Income before taxes 33,714 3,817 37,531
Income taxes (12,729) (108) $(1,372) (14,209)
-------------------------------------------------------
Net income $ 20,985 $ 3,709 $(1,372) $ 23,322
=======================================================
Net income per share:
Basic $ 1.08 $ 1.08
Diluted $ 1.05 $ 1.05
=======================================================
Number of shares used in per share calculations:
Basic 19,478 2,114 21,592
Diluted 20,010 2,114 22,124
=======================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS (Unaudited)
FOR THE THREE MONTHS ENDED MARCH 27, 1998
<CAPTION>
Historical Pro Forma
(in thousands except per share data) Helix GPC Adjustments Combined
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $25,872 $ 5,621 $31,493
----------------------------------------------------
Costs and expenses:
Cost of sales 13,857 2,842 16,699
Research and development 2,553 634 3,187
Selling, general and administrative 5,695 3,114 8,809
----------------------------------------------------
22,105 6,590 28,695
-------------------------------------------------------
Operating income 3,767 (969) 2,798
Other income 690 38 728
-------------------------------------------------------
Income before taxes 4,457 (931) 3,526
Income taxes (1,516) (145) $296 (1,365)
-------------------------------------------------------
Net income $ 2,941 $(1,076) $296 $ 2,161
=======================================================
Net income per share:
Basic $ .15 $ .10
Diluted $ .15 $ .10
=======================================================
Number of shares used in per share calculations:
Basic 19,832 2,383 22,215
Diluted 19,990 2,383 22,373
=======================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
HELIX TECHNOLOGY CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS (Unaudited)
FOR THE THREE MONTHS ENDED MARCH 28, 1997
<CAPTION>
Historical Pro Forma
(in thousands except per share data) Helix GPC Adjustments Combined
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $29,022 $5,386 $34,408
-------------------------------------------------------
Costs and expenses:
Cost of sales 15,559 2,526 18,085
Research and development 1,875 583 2,458
Selling, general and administrative 5,745 1,544 7,289
-------------------------------------------------------
23,179 4,653 27,832
-------------------------------------------------------
Operating income 5,843 733 6,576
Other income 654 22 676
-------------------------------------------------------
Income before taxes 6,497 755 7,252
Income taxes (2,339) (25) $(281) (2,645)
-------------------------------------------------------
Net income $ 4,158 $ 730 $(281) $ 4,607
=======================================================
Net income per share:
Basic $ .21 $ .21
Diluted $ .21 $ .21
=======================================================
Number of shares used in per share calculations:
Basic 19,738 2,118 21,856
Diluted 19,918 2,118 22,036
=======================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
HELIX TECHNOLOGY CORPORATION
AND
GRANVILLE-PHILLIPS COMPANY
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. The unaudited pro forma combined financial statements of Helix Technology
Corporation ("Helix") and Granville- Phillips Company ("GPC") give
retroactive effect to the merger, which has been accounted for as a pooling
of interest, as if the combining companies had been merged for all periods
presented.
2. The unaudited pro forma combined financial statements combine historical
financial data of Helix for the three months ended March 27, 1998 and March
28, 1997 and the years ended December 31, 1997, 1996 and 1995 with
financial data of GPC for the three months ended March 31, 1998 and 1997
and the years ended December 31, 1997, 1996 and 1995.
3. GPC was treated as a Subchapter S Corporation for income tax purposes
for periods subsequent to December 31, 1994 and, as such, income was
taxed at the shareholder level. As a result of the merger, the tax
status o GPC has changed from a Subchapter S Corporation to a
C-Corporation. The adjustment for income taxes in the unaudited pro forma
combined statements of operations is to reflect income taxes for GPC at
the statutory rates (after effect of permanent differences) in effect
during the periods presented as if GPC had been a C Corporation. The
adjustment for net deferred tax assets includes the impact of temporary
differences between book and tax basis of assets at the date of the
merger. In addition, the portion of undistributed earnings ($3,909)
generated during the periods that GPC was taxed as an S corporation is
transferred from retained earnings to capital in excess of par in
accordance with SAB topic 4B.
4. The unaudited pro forma combined earnings per share amounts are based on
the combined weighted average number of shares of Helix common stock and
GPC common stock outstanding for each period, based on an effective
exchange ratio of 3.2265 shares of Helix common stock for each share of GPC
common stock. The unaudited pro forma combined balance sheet reflects the
issuance of 2,382,925 shares of Helix common stock ($1.00 par value) in
exchange for all of the outstanding common stock of GPC at May 7, 1998.
5. The unaudited pro forma combined financial statements do not include
adjustments to conform the accounting policies of GPC to those followed by
Helix. The nature and extent of such adjustments, if any, will be based
upon further study and analysis and are not expected to be material.
6. Merger and other costs to be incurred by Helix and GPC are estimated to be
approximately $3,555 including approximately $1,750 of compensation expense
to be recorded relating to a mark-to-market adjustment for performance
shares and shares of common stock owned by certain key employees under
various stock incentive plans. Selling, general and administration expenses
for GPC for the three months ended March 31, 1998 includes approximately
$1,350 of the mark-to-market adjustment. The remaining merger and other
costs will be charged against net income in the second quarter when the
merger is completed and accordingly, the effects of these costs have not
been reflected in the unaudited pro forma combined statements of
operations. Total merger and other costs have been reflected in the
unaudited pro forma combined balance sheet.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HELIX TECHNOLOGY CORPORATION
Date: July 14, 1998 By: /s/Michael El-Hillow
Michael El-Hillow
Senior Vice President
and Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
EX-23 Independent Auditor's Consent
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the inclusion in this
Form 8-K/A of Helix Technology Corporation of our report dated February 18, 1998
(except for the matter discussed in Note 10, as to which the date is May 7,
1998) on Granville-Phillips Company. It should be noted that we have not audited
any financial statements of Granville-Phillips Company subsequent to December
31, 1997 or performed any audit procedures subsequent to the date of our report.
/s/Arthur Andersen LLP
Denver, Colorado
July 13, 1998
