<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 1999
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 1-4737
------
HIGH VOLTAGE ENGINEERING CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS
(State or other jurisdiction of incorporation)
04-2035796
(I.R.S. Employer Identification No.)
401 Edgewater Place, Suite 680, Wakefield, MA 01880
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (781) 224-1001
Indicate by check mark 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 90 days.
Yes No X
Number of Common Shares outstanding at November 30, 1999: 1,082.7429 shares.
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
<S> <C>
Consolidated Balance Sheets at October 30, 1999 (Unaudited) and
April 24, 1999 (Audited).......................................................................... 3
Consolidated Statements of Operations for the Three and Six Months ended
October 30, 1999 (Unaudited) and October 24, 1998 (Unaudited)..................................... 4
Consolidated Statements of Stockholders' Deficiency for the Six Months
ended October 30, 1999 (Unaudited) and for the Years ended April
24, 1999 (Audited) and April 25, 1998 (Audited)................................................... 6
Consolidated Statements of Cash Flows for the Six Months ended
October 30, 1999 (Unaudited) and October 24, 1998 (Unaudited)..................................... 7
Notes to Consolidated Financial Statements (Unaudited)............................................ 9
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...... 12
ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK................................. 16
PART II - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS.......................................................................... 17
ITEM 2. - CHANGES IN SECURITIES...................................................................... 18
ITEM 3. - DEFAULTS UPON SENIOR SECURITIES............................................................ 18
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................................ 18
ITEM 5. - OTHER INFORMATION.......................................................................... 18
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K........................................................... 18
SIGNATURES................................................................................................ 19
</TABLE>
2
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
OCTOBER 30, APRIL 24,
1999 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................... $ 2,895 $ 31,459
Restricted cash................................... 1,352 1,281
Accounts receivable, net.......................... 52,859 58,057
Refundable income taxes........................... -- 479
Inventories....................................... 41,505 39,340
Prepaid expenses and other current assets......... 6,116 1,939
---------- ----------
Total current assets............................ 104,727 132,555
PROPERTY, PLANT AND EQUIPMENT, Net.................. 69,066 53,481
INVESTMENT IN JOINT VENTURE......................... 2,416 1,805
ASSETS HELD FOR SALE................................ 3,662 3,759
OTHER ASSETS, Net................................... 29,916 16,494
RESTRICTED CASH..................................... -- 16,376
COST IN EXCESS OF NET ASSETS ACQUIRED............... 29,836 25,765
---------- ----------
$ 239,623 $ 250,235
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Current maturities of long-term debt obligations.. $ 3,916 $ 4,139
Foreign credit line............................... 43 44
Accounts payable.................................. 19,214 22,010
Accrued interest.................................. 3,456 3,071
Accrued liabilities............................... 21,556 24,399
Advance payments by customers..................... 5,205 6,119
Federal, foreign and state income taxes payable... 2,097 3,904
Deferred income taxes............................. 1,637 1,570
Redeemable put warrants........................... 2,900 --
---------- ----------
Total current liabilities....................... 60,024 65,256
REDEEMABLE PUT WARRANTS............................. -- 2,900
LONG-TERM OBLIGATIONS, LESS CURRENT MATURITIES...... 175,115 171,704
DEFERRED INCOME TAXES............................... 6,837 6,838
OTHER LIABILITIES................................... 10,964 9,648
REDEEMABLE PREFERRED STOCK.......................... 38,086 35,229
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY
Common stock..................................... 1 1
Paid-in-capital................................... 19,527 19,527
Accumulated deficit............................... (72,411) (62,342)
Common stock warrants............................. 2,200 2,200
Cumulative foreign currency translation adjustment (720) (726)
---------- ----------
Total stockholders' deficiency.................. (51,403) (41,340)
---------- ----------
$ 239,623 $ 250,235
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
OCTOBER 30, OCTOBER 24, OCTOBER 30, OCTOBER 24,
1999 1998 1999 1998
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales...................................... $ 62,227 $ 63,328 $ 117,034 $ 120,607
Cost of sales.................................. 41,183 40,845 77,299 78,379
----------- ----------- ----------- -----------
Gross profit................................. 21,044 22,483 39,735 42,228
Administrative and selling expenses............ 12,774 13,202 24,961 25,761
Research and development expenses.............. 4,445 4,583 9,341 9,433
Write off of purchased in-process research
and development.............................. -- -- 1,650 --
Restructuring charge........................... -- 110 900 390
Reimbursed environmental and litigation
costs, net................................... 3 13 5 18
Other.......................................... (85) (917) (150) (958)
----------- ----------- ----------- -----------
Income from operations....................... 3,907 5,492 3,028 7,584
Interest expense............................... 5,369 4,890 10,281 9,762
Interest income................................ 17 561 375 1,079
----------- ----------- ----------- -----------
(Loss) income from continuing operations
before income taxes and discontinued
operations............................... (1,445) 1,163 (6,878) (1,099)
Income taxes................................... 367 78 748 202
----------- ----------- ----------- -----------
(Loss) income from continuing operations
before discontinued operations........... (1,812) 1,085 (7,626) (1,301)
Discontinued operations:
Income from discontinued operations, net
of income taxes.......................... -- 283 -- 494
Gain on disposal of discontinued
operations, net of income taxes.......... 414 -- 414 --
----------- ----------- ----------- -----------
NET (LOSS) INCOME.............................. (1,398) 1,368 (7,212) (807)
Preferred dividends............................ (1,319) (1,061) (2,630) (2,090)
Accretion of redeemable preferred stock........ (109) (102) (227) (190)
----------- ----------- ----------- -----------
Net (loss) income applicable to common
stockholders.. ......................... $ (2,826) $ 205 $ (10,069) $ (3,087)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net (loss) income per common share:
Continuing operations...................... $(2,991.69) $ (72.02) $(9,679.59) $(3,306.56)
Income from discontinued operations........ -- 261.31 456.14
Gain on disposal of discontinued
operations............................... 382.27 -- 382.27 --
Net (loss) income applicable to common
stockholders............................. $(2,609.42) $ 189.29 $(9,297.32) $(2,850.42)
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
</TABLE>
4
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HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
OCTOBER 30, OCTOBER 24, OCTOBER 30, OCTOBER 24,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income (loss) per common share - assuming
dilution:
Continuing operations...................... $ (63.06)
Income from discontinued operations........ -
Gain on disposal of discontinued
operations............................... 228.78
Net income (loss) applicable
to common stockholders................... $ 165.72
-----------
-----------
Weighted average common stock outstanding 1,083 1,083 1,083 1,083
Weighted average common stock and dilutive
equivalents outstanding 1,237
------------ ----------- ----------- -----------
------------ ----------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
CUMULATIVE
FOREIGN
COMMON CURRENCY
COMMON PAID-IN ACCUMULATED STOCK TRANSLATION
STOCK CAPITAL DEFICIT WARRANTS ADJUSTMENT TOTAL
------ --------- ----------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Balance, April 26, 1997
(Audited)................. $ 1 $ 17,326 $ (54,104) $ -- $ 41 $ (36,736)
Net loss.................... (12,744) (12,744)
Preferred stock dividends... (3,085) (3,085)
Accretion of redeemable
preferred stock........... (270) (270)
Distribution to fund Letitia
common stock repurchase... (2,400) (2,400)
Change in foreign currency
translation............... (383) (383)
Common stock warrants....... 2,200 2,200
Proceeds from issuance of
common stock.............. 2,201 2,201
------ --------- ----------- --------- ------------ ----------
Balance, April 25, 1998
(Audited)................. 1 19,527 (72,603) 2,200 (342) (51,217)
Net income.................. 15,033 15,033
Preferred stock dividends... (4,329) (4,329)
Accretion of redeemable
preferred stock........... (443) (443)
Change in foreign currency
translation............... (384) (384)
------ --------- ----------- --------- ------------ ----------
Balance, April 24, 1999
(Audited)................. 1 19,527 (62,342) 2,200 (726) (41,340)
Net loss.................... (7,212) (7,212)
Preferred stock dividends... (2,630) (2,630)
Accretion of redeemable
preferred stock........... (227) (227)
Change in foreign currency
translation............... 6 6
------ --------- ----------- --------- ------------ ----------
Balance, October 30, 1999
(Unaudited)............... $ 1 $ 19,527 $ (72,411) $ 2,200 $ (720) $ (51,403)
------ --------- ----------- --------- ------------ ----------
------ --------- ----------- --------- ------------ ----------
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
OCTOBER 30, OCTOBER 24,
1999 1998
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss................................................ $ (7,212) $ (807)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Income from discontinued operations, net of income tax (494)
Depreciation and amortization......................... 6,879 4,857
Write-off of other assets and purchased research and
development......................................... 1,650 --
Non-cash interest..................................... 612 536
Deferred income taxes................................. -- 55
Undistributed earnings of affiliate................... (133) (89)
Gain on sale of discontinued operations............... (414) --
Loss (gain) on sale of assets......................... 169 (34)
Change in assets and liabilities net of effects of
business acquisition and divestitures:
Accounts receivable, net............................ 8,054 9,426
Refundable income taxes............................. 479 (44)
Inventories......................................... (2,097) (3,469)
Prepaid expenses and other current assets........... (3,751) (125)
Other assets........................................ (842) (92)
Accounts payable, accrued interest and accrued
liabilities....................................... (11,364) (5,630)
Advance payments by customers....................... (914) (1,130)
Federal, foreign and state income taxes payable..... (2,761) 1,388
----------- ----------
Net cash (used in) provided by continuing operations (11,645) 4,348
Net cash provided by discontinued operations........ -- 656
---------- ----------
Net cash (used in) provided by operating activities. (11,645) 5,004
Cash flows from investing activities:
Additions to property, plant and equipment, continuing
operations............................................ (5,861) (4,328)
Additions to property, plant and equipment, discontinued
operations............................................ -- (166)
Acquisition of Charles Evans & Associates, net of
cash acquired......................................... (34,377) --
Proceeds from the sale of discontinued operations,
net of expenses....................................... 690 --
Proceeds from the sale of assets and other,
net of expenses....................................... 1,584 48
Other -- 25
---------- ----------
Net cash used in investing activities .............. (37,964) (4,421)
---------- ----------
Cash flows from financing activities:
Net payments on foreign credit line..................... -- (1,836)
Net decrease (increase) in restricted cash.............. 16,305 11,735
Net borrowing (payments) under senior credit agreement.. 4,568 --
Principal payments on long-term obligations............. (1,292) (856)
Cash overdraft, continuing operations................... 1,464 (872)
Cash overdraft, discontinued operations................. -- (164)
---------- ----------
Net cash provided by (used in) financing activities... 21,045 8,007
---------- ----------
Effect of foreign exchange rate changes on cash............ -- 376
---------- ----------
Net (decrease) increase in cash and cash equivalents.. (28,564) 8,966
Cash and cash equivalents, beginning of the period...... 31,459 16,518
---------- ----------
Cash and cash equivalents, end of the period............ $ 2,895 $ 25,484
---------- ----------
---------- ----------
</TABLE>
7
<PAGE>
HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
OCTOBER 30, OCTOBER 24,
1999 1998
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest................................................ $ 9,290 $ 9,175
Income taxes............................................ 2,876 1,196
Supplemental Schedule of Non-cash Investing and Financing
Activities:
Preferred stock dividends-in-kind and issuable preferred
stock dividends-in-kind............................... $ 2,630 $ 2,090
Leased asset additions.................................. 90 3,252
</TABLE>
See accompanying notes to consolidated financial statements.
8
<PAGE>
HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The condensed consolidated financial statements of High Voltage
Engineering Corporation and Subsidiaries (the "Company") include accounts of
High Voltage Engineering Corporation and its subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The condensed consolidated financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission
("SEC") and, in the opinion of management, include all adjustments, which are
of a normal and recurring nature, necessary to fairly present the financial
position for the interim periods presented.
The Company operates on a 52 or 53 week fiscal year. The six months ended
October 30, 1999 and October 24, 1998 include the results of operations of the
Company for 27 week and 26 week periods, respectively.
The condensed consolidated financial statements do not contain all
disclosures included in financial statements normally prepared in accordance
with generally accepted accounting principles pursuant to SEC rules and
regulations. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements of the Company as of and
for the fiscal year ended April 24, 1999, as filed with the SEC on July 9, 1999,
and are not necessarily indicative of the results that may be expected for the
year ending April 29, 2000.
NOTE 2 - INVENTORIES
Inventories consisted of the following as of:
<TABLE>
<CAPTION>
OCTOBER 30, APRIL 24,
1999 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Raw materials........................... $ 18,881 $ 20,240
Work-in-process......................... 18,753 15,885
Finished goods.......................... 3,871 3,215
--------- -----------
Total................................ $ 41,505 $ 39,340
---------- -----------
---------- -----------
</TABLE>
NOTE 3 - ACQUISITION, DIVESTITURE AND OTHER TRANSACTIONS
On July 2, 1999, Physical Electronics, Inc. ("PHI"), a wholly owned
subsidiary of the Company, acquired all the outstanding capital stock of
Charles Evans & Associates ("CE&A") pursuant to a Stock Purchase Agreement
("Agreement") among PHI and the shareholders of CE&A. Under the Agreement,
the current shareholders of CE&A received in exchange for their stock an
aggregate consideration of $35,000 in cash reduced by the amount of all debt
of CE&A outstanding at the closing. In addition, the shareholders of CE&A
will be paid an amount equal to the additional state and federal income taxes
payable as a result of the election by PHI and the shareholders of CE&A to
have the purchase and sale of the purchased shares treated as an asset sale
under state and federal tax codes, plus an amount equal to the state and
federal income and franchise taxes payable as a result of the payment.
The acquisition has been accounted for using the purchase method of
accounting, and accordingly, the purchase price has been allocated to the
assets purchased and the liabilities assumed based upon management's
preliminary estimate of the fair values at the date of the acquisition. The
Company has charged historical earnings $1,650 for purchased research
and development which had been revalued. The excess of the purchase price
over the fair value of the net assets acquired has been recorded as cost in
excess of assets acquired, which will be amortized on a straight-line basis
over 20 years.
9
<PAGE>
The net purchase price was allocated as follows:
<TABLE>
<CAPTION>
CE&A
---------
<S> <C>
Working capital, other than cash acquired....... $ 100
Property, plant and equipment................... 15,737
Other assets (includes purchased in-process
research and development).................... 15,724
Cost in excess of assets acquired............... 5,806
Other liabilities............................... (2,990)
---------
Purchase price, net of cash received............ $ 34,377
---------
---------
</TABLE>
The operating results of the acquired business has been included in the
Company's consolidated statement of operations from the date of acquisition. The
following pro forma financial information illustrates the effects of the
acquisition of CE&A after giving effect to the impact of certain adjustments,
such as amortization, depreciation and certain purchase accounting adjustments.
On the basis of a pro forma consolidation of the results of operations as if the
acquisition had taken place at the beginning of the periods presented,
consolidated net sales would have been $119,598 and $132,329, for the six months
ended October 30, 1999 and October 24, 1998, respectively. Consolidated pro
forma loss from continuing operations before discontinued operations would have
been $6,534 and $71 for the six months ended October 30, 1999 and October 24,
1998, respectively. Consolidated pro forma net loss applicable to common
stockholders would have been $8,977 and $1,857, for the six months ended
October 30, 1999 and October 24, 1998, respectively. Consolidated pro forma
net loss from continuing operations per common share applicable to common
shareholders would have been $9,679.59 and $2,170.82 for the six months ended
October 30, 1999 and October 24, 1998, respectively. The pro forma results are
not necessarily indicative of the actual results as if the transactions had been
in effect for the entire periods presented. In addition, they are not intended
to be a projection of future results.
DIVESTITURE
On April 23, 1999, the Company sold substantially all of the assets and
liabilities of its Natvar operating unit. The price for Natvar was $26,000, paid
in cash. Of the aggregate $26,000 received by the Company in connection with the
sale, $1,250 was placed into escrow for periods up to one year to secure certain
indemnification obligations of the Company and to satisfy possible purchase
price adjustments. Revenues applicable to discontinued operations were
approximately $7,923 for the six months ended October 24, 1998.
NOTE 4 - CONTINGENCIES
The nature of the Company's business is such that it is regularly involved
in legal proceedings incidental to its business and the Company believes that
none of these proceedings are material.
In March 1998, the Company was dismissed without prejudice as a defendant in
an action commenced in November 1996 against the Company and six others by
Chicago-Dubuque Foundry Corporation, and its property insurer. In May 1998, the
remaining claims against the Company by intervenor plaintiffs were also
dismissed without prejudice. During fiscal 1999, a plaintiff named the Company
as a Third-Party Defendant, claiming indemnity under the terms of its purchase
orders and under a "failure to warn" claim. Most, if not all, other defendants
have now also filed cross-claims against the Company for contribution or
indemnity. The Company moved for summary judgement on the basis that since the
connectors involved were not manufactured by the Company, it can have no
liability. In August 1999, the motion for summary judgement was sustained and
all claims against the Company were dismissed.
In March 1998, the Company's Robicon Corporation subsidiary initiated
litigation against Toshiba International Corporation ("Toshiba") in the
United States District Court for the Western District of Pennsylvania
alleging infringement of one of Robicon's Perfect Harmony patents. In June
1998, Toshiba filed suit against Robicon and several other defendants in the
United States District Court for the Southern District of Texas alleging,
among other things, false
10
<PAGE>
and disparaging comments concerning Toshiba, interference with contract,
violation of the Texas Competition and Trade Practices Statute and civil
conspiracy to restrict Toshiba's business and cause the wrongful termination of
a purchase order of one of its customers. Damages under each section are claimed
to be in excess of $75,000, the federal statutory minimum, in addition to a
claim for punitive damages. In its suit, Toshiba has also claimed that Robicon
is infringing a patent held by Toshiba and requested a declaratory judgment that
Robicon's patent, which is the subject of the Pennsylvania action, is invalid.
In March 1999, the Texas District Court dismissed without prejudice all claims
except the alleged patent infringement by Robicon and the request for
declaratory judgement. These claims were then transferred to the Western
District of Pennsylvania. Also in March 1999, Toshiba filed a petition in Harris
County, Texas in which it realleged the dismissed claims citing the additional
costs by Toshiba to reinstate its purchase order and damages to its reputation
not exceeding $5.0 million. In light of the preliminary stage of the
proceedings, Robicon is unable to assess the likelihood of liability, if any,
arising from the action initiated by Toshiba in Pennsylvania.
Certain other claims, suits and complaints have been filed or are pending
against the Company. In the opinion of the Company, all such matters are without
merit or are of such kind, or involve such amounts, as would not have a material
effect on the consolidated financial position or the results of operations of
the Company if resolved unfavorably to the Company. If estimates change, there
is no assurances these items will not require additional accruals by the
Company.
NOTE 5 - SEGMENT DATA
The Company operates in five industry segments. The Company's reportable
segments are individual business units that offer different products and
services. Each business unit has its own management team and manufacturing
facilities and maintains its own independent market identity. The Company
evaluates performance based on operating earnings of the respective business
units. Information concerning operations in these businesses is as follows:
<TABLE>
<CAPTION>
DEPRECIATION
NET OPERATING IDENTIFIABLE AND CAPITAL
SALES INCOME ASSETS AMORTIZATION EXPENDITURES
--------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED OCTOBER 24, 1998
High power conversion
products ...................... $ 42,098 $ 1,907 $ 39,986 $ 516 $ 3,497
Advanced surface analysis
instruments ................... 28,024 594 71,159 2,029 2,366
High performance modular
power connectors .............. 13,629 3,057 17,328 709 685
Customized monitoring
instrumentation ............... 31,997 3,465 49,794 1,291 772
Corporate and other ............. 4,859 (1,439) 47,090 312 260
--------- ---------- ------------ ------------ ------------
Consolidated (Unaudited)....... $120,607 $ 7,584 $ 225,357 $ 4,857 $ 7,580
--------- ---------- ------------ ------------ ------------
--------- ---------- ------------ ------------ ------------
SIX MONTHS ENDED OCTOBER 30, 1999
High power conversion
products ...................... $ 36,768 $ (1,553) $ 48,606 $ 931 $ 242
Advanced surface analysis
instruments and services....... 29,290 (1,796) 110,586 3,526 5,008
High performance modular
power connectors .............. 15,133 2,930 15,848 867 478
Customized monitoring
instrumentation ............... 30,899 3,131 47,757 1,252 191
Corporate and other ............. 4,944 316 16,826 303 32
--------- ---------- ------------ ------------ ------------
Consolidated (Unaudited)....... $117,034 $ 3,028 $ 239,623 $ 6,879 $ 5,951
--------- ---------- ------------ ------------ ------------
--------- ---------- ------------ ------------ ------------
</TABLE>
11
<PAGE>
NOTE 6 - COMPREHENSIVE INCOME
In February 1998, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," which establishes standards for the reporting and display of
comprehensive income. For the six months ended October 30, 1999 and October 24,
1998, respectively, the components of other comprehensive income were
immaterial. The components of other comprehensive income consist solely of
foreign currency translation adjustments.
NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting For Derivative and
Hedging Activities" which establishes accounting and reporting standards for
derivative and hedging activities. The Company does not believe adoption of SFAS
No. 133 will have a material impact on its financial disclosures.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Except as otherwise indicated, the following discussion relates to the
Company on a historical basis without giving effect to acquisitions. This report
may make forward-looking statements regarding future events or the future
financial performance of the Company. We caution you that these statements are
only predictions and that actual events or results may differ materially. We
refer you to documents the Company files from time to time with the Securities
and Exchange Commission, and specifically the most recent Annual Report on Form
10-K and the "Risk Factors" section in the Company's most recent Registration
Statement on Form S-4 on file. This document identifies and describes important
factors that can cause the after-results to differ materially from those
contained in any forward-looking statements we may make. The following
discussion should be read in conjunction with the consolidated financial
statements and notes thereto contained elsewhere herein.
The consolidated financial statements of the Company include the accounts of
High Voltage Engineering Corporation and its subsidiaries after elimination of
material inter-company transactions and balances. As used in this filing, the
terms "fiscal 2000" and "fiscal 1999" refer to the Company's fiscal years ended
April 29, 2000 and April 24, 1999, respectively. The Company operates on a 52 or
53 week fiscal year. The six months ended October 30, 1999 and October 24, 1998
include the results of operations of the Company for 27 week and 26 week
periods, respectively.
As a result of the sale by the Company of substantially all of the assets of
the Company's Natvar operating unit on April 23, 1999, the Company's
consolidated results have been restated to reclassify the results of Natvar's
operations as discontinued operations.
The Company conducts its business through five independent operating units,
Physical Electronics, Inc. and subsidiaries ("PHI"), Maxima Technologies, Inc.
and subsidiaries ("Maxima"), Robicon Corporation and subsidiaries ("Robicon"),
Anderson Interconnect, Inc. and subsidiaries ("Anderson") and High Voltage
Engineering Europa, B.V. ("HVE Europa"), each of which has its own management
team and manufacturing facilities and maintains its own independent market
identity.
SEASONALITY; VARIABILITY OF OPERATING RESULTS
The majority of the Company's operating units have historically recorded the
strongest operating results in the fourth quarter of the fiscal year due in part
to seasonal considerations and other factors.
The timing of orders placed by the Company's customers has varied with,
among other factors, the introduction of new products, product life cycles,
customer attempts to manage inventory levels, competitive conditions, general
economic conditions and the availability of funding for scientific and
educational research. The variability of the level and timing of orders has,
from time to time, resulted in significant periodic and quarterly fluctuations
in the operations of the Company's operating units. Such variability is
particularly evident at HVE Europa, which ships on average four particle
accelerator systems per year. These systems are typically sold for between $1.0
million and $2.0 million each and have long lead times. As a result, the timing
12
<PAGE>
of HVE Europa's shipments within any fiscal year can have a material impact on
an individual quarter's results.
ACQUISITION OF CHARLES EVANS & ASSOCIATES
On July 2, 1999, PHI acquired all the outstanding capital stock of
Charles Evans & Associates ("CE&A"). Under the Stock Purchase Agreement
("Agreement"), the shareholders of CE&A received in exchange for their stock
an aggregate consideration of $35.0 million in cash reduced by the amount of
all debt of CE&A outstanding at the closing. In addition, the shareholders of
CE&A will be paid an amount equal to the additional state and federal income
taxes payable as a result of the election by PHI and the shareholders of CE&A
to have the purchase and sale of the purchased shares treated as an asset
sale under state and federal tax codes, plus an amount equal to the state and
federal income and franchise taxes payable as a result of the payment.
ACQUISITION OF ANSALDO SISTEMI INDUSTRIALI
On October 13, 1999, the Company entered into a definitive purchase
agreement to acquire all the outstanding capital stock of Ansaldo Sistemi
Industriali, S.p.A. ("ASI"), a wholly owned subsidiary of Finmeccanica S.p.A.
The purchase of ASI is intended to significantly strengthen the Company's
global position in high power conversion products. ASI, which is
headquartered in Genova, Italy and has operations in Italy, France, Germany,
UK, and the USA and joint ventures in Russia and India, had revenues over
$200.0 million for their fiscal year ended December 31, 1998.
Combining Ansaldo's strong presence in European and Asian markets with
Robicon's strong presence in North and South America is intended to yield a
stronger global presence for each company. In addition, management believes
Ansaldo's expertise in the metals processing, pulp and paper, materials
handling, marine and cable transport industries, will act as a strong
complement to Robicon's traditional strengths in the water and wastewater,
oil and gas, silicon and glass, cement and chemical industries. Furthermore,
the complementary nature of Ansaldo and Robicon's respective geographic and
industry strengths may provide significant cross selling opportunities to
both enterprises.
CONSOLIDATED
Net sales for the first half of fiscal 2000 were $117.0 million, which was a
$3.6 million or 3.0% decrease from the first half of fiscal 1999. Excluding net
sales from CE&A, which was acquired on July 2, 1999, net sales decreased $10.8
million, or 8.9%, during the first half of fiscal 2000. Net loss increased for
the first half of fiscal 2000 to $7.2 million from $0.8 million in the first
half of fiscal 1999. The loss increase was due primarily to: (i) lower sales
volume, (ii) a restructuring charge at Robicon for a reduction in headcount,
(iii) a write off of purchased in-process research and development in connection
with the CE&A acquisition, and (iv) a decrease in interest income due to lower
cash balances.
SEGMENT ANALYSIS:
THREE MONTHS ENDED OCTOBER 30, 1999 COMPARED TO THREE MONTHS ENDED
OCTOBER 24, 1998
THE HIGH POWER CONVERSION PRODUCTS SEGMENT reported net sales of $19.5
million For the second quarter of fiscal 2000 which was a decrease of $2.5
million, or 11.4% from the second quarter of fiscal 1999. The reduction in
net sales was a result of reduced shipments of low voltage drives, power
control systems and medium voltage variable frequency drives. The low voltage
decrease was a result of weakness in the municipal marketplace and Robicon's
decision to focus on the more profitable higherhorse power drives markets.
The power control systems decrease was a result of the cyclical nature of
power control systems orders. The medium voltage decrease was a result of the
continued softness in the international oil and gas markets due to low energy
prices. Although oil and gas prices have shown some signs of recovery
recently, Robicon is not expected to see the effect of this increase during
this fiscal year. Operating income decreased $1.5 million to $0.6 million in
the second quarter of fiscal 2000 as compared to the second quarter of fiscal
1999. Operating income in the fiscal second quarter of fiscal 1999 included a
litigation settlement of $0.8 million. Operating income in the second quarter
of fiscal 2000 included $0.2 million expense relating to the Toshiba
litigation. The remaining decrease was primarily the result of lower gross
profit due to lower net sales which was offset by lower administrative and
selling expenses due to actions taken in first quarter to reduce headcount.
13
<PAGE>
THE ADVANCED SURFACE ANALYSIS INSTRUMENTS SEGMENT reported net sales of
$18.1 million for the second quarter of fiscal 2000 which was an increase of
$1.4 million, or 8.6% from the second quarter of fiscal 1999. Excluding net
sales from CE&A, which was acquired on July 2, 1999, net sales for PHI
decreased $4.2 million or 25.0% during the second quarter of fiscal 2000 as
compared to the second quarter of fiscal 1999. The decrease was the result of
continued softness in the semiconductor market, especially for PHI's Trift
products, as well as reduced ESCA product sales to the industrial lab
markets. Operating income decreased $1.2 million to $0.3 million in the
second quarter of fiscal 2000 as compared to the second quarter of fiscal
1999. Excluding operating income from CE&A, operating income decreased $1.9
million during the second quarter of fiscal 2000 as compared to the second
quarter of fiscal 1999. This decrease in operating income was the net result
of lower gross profit due to lower net sales.
THE HIGH PERFORMANCE MODULAR POWER CONNECTORS SEGMENT reported net sales of
$7.2 million for the second quarter of fiscal 2000 which was a slight increase
of $0.1 million from the second quarter of fiscal 1999. Growth in the
telecommunications networking equipment markets and certain industrial markets
continued to fuel the growth for Anderson Instruments in this segment. Operating
income decreased $0.1 million to $1.4 million for the second quarter of fiscal
2000 as compared to the second quarter of fiscal 1999 due to the additional
investment in infrastructure to support this segment's planned growth strategy.
THE CUSTOMIZED MONITORING INSTRUMENTATION SEGMENT reported net sales of
$14.7 million for the second quarter of fiscal 2000 which was a decrease of $0.5
million, or 3.3%, from the second quarter of fiscal 1999. The reduction in this
segment was due to the phase out of some older products being sold under the
Stewart Warner brand and continued softness in the European agricultural market.
Operating income decreased slightly to $1.2 million in the second quarter of
fiscal 2000 as compared to the second quarter of fiscal 1999. The gross profit
decline of $0.7 million, due to higher warranty cost on some discontinued
Stewart Warner brand products and a mix shift towards lower margin products,
were partially offset by expense savings due to the efficiencies obtained in
combining the acquired Stewart Warner Instrument Company operations with those
of the Company's existing Maxima Technologies subsidiary.
SIX MONTHS ENDED OCTOBER 30, 1999 COMPARED TO THE SIX MONTHS ENDED
OCTOBER 24, 1998
THE HIGH POWER CONVERSION PRODUCTS SEGEMNT reported net sales of $36.8
million for the first half of fiscal 2000 which was a decrease of $5.3
million, or 12.7% from the first half of fiscal 1999. The reduction in net
sales was a result of reduced shipments of medium voltage variable frequency
drives into the international oil and gas markets which continue to suffer
from reduced capital spending due to low energy prices, combined with a slow
down in demand for Robicon's low voltage drives due to the softness in the
municipal market place, and the cyclical nature of power control systems
orders. Operating loss increased $3.5 million to $1.6 million in the first
half of fiscal 2000 as compared to the first half of fiscal 1999. This
increase was primarily the result of lower gross profit due to the lower net
sales, litigation costs of $0.5 million relating to a patent infringement
case and the recording of a restructuring charge.
During the first half of fiscal 2000, the Company took actions to reduce
costs at Robicon to compensate for the slow down in some of its served markets
mentioned above. These actions resulted in the Company recording a $0.9 million
restructuring charge for severance relating to the reduction of headcount at
Robicon.
THE ADVANCED SURFACE ANALYSIS INSTRUMENTS SEGMENT reported net sales of
$29.3 million for the first half of fiscal 2000 which was a slight increase
of $1.3 million from the first half of fiscal 1999. Excluding net sales from
CE&A, which was acquired on July 2, 1999, net sales decreased $5.9 million or
21.2% during the first half of fiscal 2000 as compared to the first half of
fiscal 1999. The decrease was the result of continued softness in the
semiconductor market, weaker sales of PHI's Trift products, as well as
reduced ESCA product sales to industrial lab markets. Operating loss
increased $2.4 million to $1.8 million in the first half of fiscal 2000 as
compared to the first half of fiscal 1999. Excluding the operating loss of
$0.7 million for CE&A, which included a charge of $1.7 million to write off
purchased in-process research and development expense, which had been valued
in accordance with purchase accounting procedures, operating income decreased
$1.7 million. This decrease in operating income was the result of reduced
gross profit due to lower net sales offset by a small reduction in
administrative and selling expenses due to lower commissions relating to the
lower net sales.
14
<PAGE>
THE HIGH PERFORMANCE MODULAR POWER CONNECTORS SEGMENT reported net sales of
$15.1 million for the first half of fiscal 2000 which was an increase of $1.5
million, or 10.9% from the first half of fiscal 1999. Growth in the
telecommunications networking equipment markets and certain industrial markets
continued to fuel the growth in this segment. Operating income was decreased
$0.1 to $2.9 million for the first half of fiscal 2000 as compared to the first
half of fiscal 1999 due to the additional investment in infrastructure to
support this segment's growth strategy.
THE CUSTOMIZED MONITORING INSTRUMENTATION SEGEMENT reported net sales of
$30.9 million for the first half of fiscal 2000 which was a decrease of $1.1
million, or 3.4%, from the first half of fiscal 1999. The reduction in this
segment was due to the phase out of some older products being sold under the
Stewart Warner brand and continued softness in the European agricultural market.
Operating income decreased slightly to $3.1 million in the first half of fiscal
2000 as compared to the first half of fiscal 1999. The gross profit decline of
$1.2 million, due to lower net sales, higher warranty cost on some discontinued
Stewart Warner brand products and a shift towards lower margin products, were
partially offset by expense savings due to the efficiencies obtained in
combining the acquired Stewart Warner Instrument Company operations with those
of the Company's existing Maxima Technologies subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity needs are primarily for working capital, capital
expenditures and acquisitions. The Company's primary sources of liquidity
have been funds provided by operations, proceeds from the sale of
discontinued operations and asset sales, as well as proceeds from financing
activities.
The Company maintains a $25.0 million revolving credit facility (the
"Revolving Credit Facility") which is primarily maintained to fund the Company's
working capital requirements and has a $10.0 million sublimit for the issuance
of standby letters of credit. The Revolving Credit Facility expires in 2002.
Borrowings outstanding under the Revolving Credit Facility as of October 30,
1999 were $4.6 million. There were $3.3 million in letters of credit commitments
outstanding. Accordingly, credit availability under this facility was $17.1
million as of such date. The Revolving Credit Facility contains covenants
restricting the ability of the Company's operating units to, among other things,
pay dividends or make other restricted payments to the Company.
As of October 30, 1999, the Company had total indebtedness (including
redeemable put warrants) of $182.0 million and mandatory redeemable preferred
stock with an aggregate liquidation preference of $39.6 million.
The Company does not anticipate any significant principal payment
obligations under any of its outstanding indebtedness prior to maturity of
the Company's 10 1/2% Senior Notes due 2004, other than the Revolving Credit
Facility in 2002, as well as $1.6 million of unsecured seller notes related
to the acquisition of Maxima-Barcelona which are due on March 16, 2000 and
$2.9 million of redeemable put warrants puttable May 1, 2000. The ability of
the Company to satisfy its obligations under existing indebtedness and
preferred stock will be primarily dependent upon the future financial and
operating performance of its operating units and upon the Company's ability
to renew or refinance borrowings or to raise additional equity capital as
necessary.
The Company's working capital was $44.7 million and $67.3 million at
October 30, 1999 and April 24, 1999, respectively. The Company's results from
continuing operations in the first half of fiscal 2000 used $11.6 million in
cash, compared to the $4.3 million provided by operation for the first half
of fiscal 1999. Net loss after adjustments to reconcile to cash from
operating activities provided cash of $1.6 million, plus a net use of cash
for working capital of $12.5 million.
The Company invested $5.9 million in capital expenditures in the first
half of fiscal 2000 primarily at PHI for the planned introduction of a new
product line. The Company used $34.4 million for the purchase of Charles
Evans & Associates on July 2, 1999, net of cash acquired.
NEW ACCOUNTING PRONOUNCEMENTS
During 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes accounting and reporting standards for derivative instruments and
for hedging activities. The Company does not believe adoption will have a
material impact on its financial statement disclosures.
15
<PAGE>
YEAR 2000
An issue affecting the Company is whether computer systems and applications
will recognize and process the Year 2000 and beyond. The Company is in final
stages of remediation and internal testing of the systems, the failure of which
would have an impact on its business operations and product offerings. In
addition, the Company believes it has devoted sufficient resources to identify
and monitor customers, suppliers and others whose failure to identify and
remediate their internal systems or product offerings would adversely affect the
operations of the Company. However, there can be no assurance that the
customers, suppliers and others will timely resolve their own Year 2000
compliance issues.
Costs related to the Year 2000 issues are being expensed during the period in
which they are incurred. The financial impact to the Company of implementing the
systems changes necessary to become Year 2000 compliant has not been and is not
anticipated to be material to its business, operations, financial condition,
liquidity and capital resources. Those estimates do not include any allocation
with respect to time devoted by regular employees of the Company to these
efforts, since the Company does not separately track that time. There are
uncertainties as to the future costs associated with the Year 2000 date change
which may affect the Company's expectations. Factors that could influence the
amount and timing of future costs include the success of the Company in
identifying systems and programs that are not Year 2000 compliant, the nature
and amount of programming required to upgrade or replace each of the affected
programs or systems, the availability, rate and magnitude of related labor and
consulting costs and the success of the Company's customers and suppliers.
Recognizing the many factors that are outside its control, the Company cannot
state that it will be unaffected by the Year 2000 issue.
If the Company's Year 2000 remediation efforts are not successful, the most
likely worst case scenario would include some or all of the Company's operating
subsidiaries being unable to manufacture or distribute products for a period of
time. The Company cannot currently estimate the likelihood of such a scenario or
the financial impact of such an occurrence upon the Company because it cannot
predict the extent or duration of any such disruption. As a result, the Company
plans to have certain resources available to deal with any possible disruptions.
ITEM 3.--QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The primary market risks for the Company is interest rate risk and foreign
currency risk. Other risks dealing with contingencies are described in Note 4 to
the Company's notes to the consolidated financial statements included under Item
1 provided elsewhere herein and in Item 1 of Part II of this report.
INTEREST RATE RISK
The Company's exposure to interest rate risk is limited to the Company's
borrowing arrangements under the Revolving Credit Facility. The interest rates
on the Company's other long-term debt are fixed and the majority of this debt
matures in the Company's fiscal year ended April 24, 2004. The Company has not
engaged in derivative transactions, such as interest rate swaps, caps or
collars, in order to reduce it risk, nor does the Company have any plans to do
so in the future. Assuming a maximum draw-down of the Revolving Credit Facility,
a 100 basis point increase in interest rates would have approximately a $200,000
negative impact on the earnings of the Company.
FOREIGN CURRENCY RISK
The Company manufactures products in the U.S., The Netherlands, Spain,
Ireland and Mexico and sells products worldwide. Therefore the Company's
operating results are subject to fluctuations in foreign currency exchange
rates, as well as the translation of its foreign operations into U.S. dollars.
The risks associated with operating in foreign currencies could adversely affect
the Company's future operating results. Additionally, currency fluctuations
could improve the competitive position of the Company's foreign competition if
the value of the U.S. dollar rises in relation to the local currencies of such
competition. The Company sometimes enters into forward exchange contracts to
manage exposure related to certain foreign currency commitments, certain foreign
currency denominated balance sheet positions and anticipated foreign currency
denominated expenditures. All forward exchange contracts are designated as and
effective as a hedge and are highly inversely correlated to the hedged item. If
a derivative contract terminates prior to maturity, the investment is shown at
its fair value with the resulting gain or loss reflected in operating results.
16
<PAGE>
Gains and losses on contracts to hedge identifiable foreign currency commitments
are deferred and accounted for as part of the related foreign currency
transaction. Gains and losses on all other forward exchange contracts are
included in current income.
PART II
OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
The nature of the Company's business is such that it is regularly involved
in legal proceedings incidental to its business and the Company believes that
none of these proceedings are material.
In March 1998, the Company was dismissed without prejudice as a defendant in
an action commenced in November 1996 against the Company and six others by
Chicago-Dubuque Foundry Corporation, and its property insurer. In May 1998, the
remaining claims against the Company by intervenor plaintiffs were also
dismissed without prejudice. During fiscal 1999, a plaintiff named the Company
as a Third-Party Defendant, claiming indemnity under the terms of its purchase
orders and under a "failure to warn" claim. Most, if not all, other defendants
have now also filed cross-claims against the Company for contribution or
indemnity. The Company moved for summary judgement on the basis that since the
connectors involved were not manufactured by the Company, it can have no
liability. In August 1999, the motion for summary judgement was sustained and
all claims against the Company were dismissed.
In March 1998, Robicon initiated litigation against Toshiba International
Corporation ("Toshiba") in the United States District Court for the Western
District of Pennsylvania alleging infringement of one of Robicon's Perfect
Harmony patents. In June 1998, Toshiba filed suit against Robicon and several
other defendants in the United States District Court for the Southern District
of Texas alleging, among other things, false and disparaging comments concerning
Toshiba, interference with contract, violation of the Texas Competition and
Trade Practices Statute and civil conspiracy to restrict Toshiba's business and
cause the wrongful termination of a purchase order of one of its customers.
Damages under each section are claimed to be in excess of $75,000, the federal
statutory minimum, in addition to a claim for punitive damages. In its suit,
Toshiba has also claimed that Robicon is infringing a patent held by Toshiba and
requested a declaratory judgment that Robicon's patent, which is the subject of
the Pennsylvania action, is invalid. In March 1999, the Texas District Court
dismissed without prejudice all claims except the alleged patent infringement by
Robicon and the request for declaratory judgement. These claims were then
transferred to the Western District of Pennsylvania. Also in March 1999, Toshiba
filed a petition in Harris County, Texas in which it realleged the dismissed
claims citing the additional costs by Toshiba to reinstate its purchase order
and damages to its reputation not exceeding $5.0 million. In light of the
preliminary stage of the proceedings, Robicon is unable to assess the likelihood
of liability, if any, arising from the action initiated by Toshiba in
Pennsylvania. Also in March 1999, Toshiba filed a petition in Harris County,
Texas in which it realleged the dismissed claims citing the additional costs by
Toshiba to reinstate its purchase order and damages to its reputation not
exceeding $5.0 million. In light of the preliminary stage of the proceedings,
Robicon is unable to assess the likelihood of liability, if any, arising from
the action initiated by Toshiba in Pennsylvania.
Certain other claims, suits and complaints have been filed or are pending
against the Company. In the opinion of the Company, all such matters are without
merit or are of such kind, or involve such amounts, as would not have a material
effect on the consolidated financial position or the results of operations of
the Company if resolved unfavorably to the Company. If estimates change, there
is no assurances these items will not require additional accruals by the
Company.
17
<PAGE>
ITEM 2. - CHANGES IN SECURITIES
None.
ITEM 3. - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. - OTHER INFORMATION
None.
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
(i) On May 7, 1999, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K, dated May 7, 1999, in which the
Company reported under Item 2 of Form 8-K the disposition of certain
assets relating to its Natvar Company business division. This report also
included the following financial statements under Item 7 thereof:
High Voltage Engineering Corporation and Subsidiaries Unaudited Pro
Forma Condensed Consolidated Balance Sheet as of January 23, 1999
High Voltage Engineering Corporation and Subsidiaries Unaudited Pro
Forma Condensed Consolidated Statement of Operations for the Fiscal
Year Ended April 25, 1998
High Voltage Engineering Corporation and Subsidiaries Unaudited Pro
Forma Condensed Consolidated Statement of Operations for the Nine
Months Ended January 23, 1999
The Company also filed as part of Item 7 an exhibit copy of the Asset
Purchase Agreement, dated as of April 8, 1999, among the Company, Natvar
Holdings, Inc. and Tekni-Plex, Inc.
(ii) On July 19, 1999, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K, dated July 19, 1999, in which
the Company reported under Item 2 of Form 8-K the acquisition of all of
the outstanding capital stock of Charles Evans & Associates. The
Company also filed as part of Item 7 of this report an exhibit copy of
the Stock Purchase Agreement, dated as of June 2, 1999, among (i)
Physical Electronics, Inc., (ii) Charles Evans & Associates, (iii) the
Trustee of the Charles Evans & Associates Employee Stock Ownership
Plan, and (iv) the stockholders of Charles Evans & Associates named on
Schedule A thereto.
On September 17, 1999, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K/A, dated September 17, 1999, in
which the Company reported under Item 2 of Form 8-K/A the acquisition of
all of the outstanding capital stock of Charles Evans & Associates. The
Company also filed as part of Item 7 of this report an exhibit copy of the
Stock Purchase Agreement, dated as of June 2, 1999, among (i) Physical
Electronics, Inc., (ii) Charles Evans & Associates, (iii) the Trustee of
the Charles Evans & Associates Employee Stock Ownership Plan, and (iv) the
stockholders of Charles Evans & Associates named on Schedule A thereto.
On October 20, 1999, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K, dated October 20, 1999, in which
the Company reported under Item 5 of Form 8-K that it has entered into a
definitive purchase agreement to acquire all the outstanding common
stock of Ansaldo Sistemi Industialis, S.p.A. ("ASI"), a wholly owned
subsidiary of Finmeccanica, S.p.A. In connection with the announcement,
the Company issued a press Release which is attached to the Form 8-K as
exhibit 2.1.
18
<PAGE>
SIGNATURES
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 hereto duly authorized.
HIGH VOLTAGE ENGINEERING CORPORATION
Dated: November 30, 1999 By: /s/ Joseph W. McHugh, Jr.
----------------------------------------
Joseph W. McHugh, Jr.
Chief Financial Officer and Principal
Accounting Officer
19
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