<PAGE> 1
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Period Ended NOVEMBER 28, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the Transition Period
From____________________to____________________.
COMMISSION FILE NUMBER 0-25068.
--------
HASKEL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4107640
---------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
100 EAST GRAHAM PLACE
BURBANK, CALIFORNIA 91502
------------------- -----
(Address of principal executive offices) (Zip Code)
(818) 843 - 4000
----------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
--------------
(Former name, address and former fiscal year, if changed since last report)
Indicated 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 periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]. No [ ].
Applicable Only to Issuers Involved in Bankruptcy
Proceedings During the Preceeding Five Years
Indicated by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. Yes [ ]. No [ ].
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
AS OF JANUARY 4, 1999 THE REGISTRANT HAD 4,759,205 SHARES OF CLASS A COMMON
STOCK, AND 40,000 SHARES OF CLASS B COMMON STOCK OUTSTANDING.
<PAGE> 2
INDEX
HASKEL INTERNATIONAL, INC.
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
<S> <C>
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets - May 30, 1998 and November 28, 1998 ....................... 3
Consolidated income statements - Three months ended November 28, 1997
and 1998; Six months ended November 28, 1997 and 1998 .................................. 5
Consolidated statements of cash flows - Six months ended November 28, 1997 and 1998 .... 6
Notes to consolidated financial statements - November 28, 1998 ......................... 7
Item 2. Management's discussion and analysis of financial condition and results of operations 10
PART II. OTHER INFORMATION
Item 4. Submission of matters to a vote of security holders ................................ 13
Item 5. Other Matters ...................................................................... 15
Item 6. Exhibits and Reports on Form 8-K ................................................... 15
</TABLE>
2
<PAGE> 3
HASKEL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
May 30, November 28,
1998 1998
----------- -----------
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 9,710,000 $12,352,000
Accounts receivable, net 15,333,000 11,275,000
Inventories 10,450,000 9,748,000
Prepaid expenses and other current assets 630,000 472,000
Deferred income taxes 1,004,000 1,005,000
----------- -----------
TOTAL CURRENT ASSETS 37,127,000 34,852,000
PROPERTY, PLANT & EQUIPMENT, Net 5,315,000 5,369,000
GOODWILL, Net 1,474,000 1,258,000
DEFERRED INCOME TAXES 2,167,000 2,142,000
OTHER ASSETS 209,000 403,000
----------- -----------
TOTAL $46,292,000 $44,024,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
HASKEL INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
(Unaudited)
<TABLE>
<CAPTION>
May 30, November 28,
1998 1998
------------ ------------
LIABILITIES & SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Current portion of long-term debt $ 960,000 $ 268,000
Accounts payable 7,007,000 4,241,000
Dividends payable 331,000 336,000
Accrued liabilities 2,785,000 1,967,000
Income taxes payable 584,000 1,399,000
------------ ------------
TOTAL CURRENT LIABILITIES 11,667,000 8,211,000
LONG-TERM DEBT 466,000 23,000
OTHER ACCRUED LIABILITIES 2,278,000 2,338,000
COMMITMENTS & CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred Stock: 2,000,000 shares authorized;
none issued and outstanding
Common Stock:
Class A, without par value; 20,000,000 shares
authorized; 4,759,205 issued and outstanding
at May 30, 1998 and November 28, 1998 13,922,000 13,922,000
Class B, without par value; 40,000 shares
authorized, issued and outstanding at
May 30, 1998 and November 28, 1998 19,000 19,000
Retained Earnings 18,144,000 19,444,000
Cumulative foreign currency translation adjustment (204,000) 67,000
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 31,881,000 33,452,000
------------ ------------
TOTAL $ 46,292,000 $ 44,024,000
============ ============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
HASKEL INTERNATIONAL, INC.
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
November 28, November 28,
1997 1998 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SALES $12,332,000 $12,896,000 $24,850,000 $24,980,000
COST OF SALES 6,205,000 6,868,000 12,752,000 13,241,000
----------- ----------- ----------- -----------
GROSS PROFIT 6,127,000 6,028,000 12,098,000 11,739,000
EXPENSES:
Selling 2,184,000 2,222,000 4,136,000 4,285,000
General and administrative 1,728,000 1,975,000 3,664,000 3,872,000
Engineering design, research and development 349,000 274,000 627,000 609,000
----------- ----------- ----------- -----------
Total 4,261,000 4,471,000 8,427,000 8,766,000
----------- ----------- ----------- -----------
OPERATING INCOME 1,866,000 1,557,000 3,671,000 2,973,000
OTHER INCOME 44,000 189,000 131,000 305,000
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 1,910,000 1,746,000 3,802,000 3,278,000
PROVISION FOR INCOME TAXES 680,000 689,000 1,457,000 1,302,000
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS 1,230,000 1,057,000 2,345,000 1,976,000
DISCONTINUED OPERATIONS:
Gain on disposal of segment 346,000 346,000
----------- ----------- ----------- -----------
NET INCOME $ 1,576,000 $ 1,057,000 $ 2,691,000 $ 1,976,000
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
HASKEL INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
November 28,
1997 1998
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash provided by continuing operations $ 1,468,000 $ 4,819,000
Net cash used in discontinued operations (348,000)
------------ ------------
Net cash provided by operating activities 1,120,000 4,819,000
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,049,000) (684,000)
Proceeds from sale of property 29,000 40,000
Purchase of subsidiary (net of cash acquired) (30,000) --
------------ ------------
Net cash used in investing activities (1,050,000) (644,000)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 96,000
Principal payments on long-term debt (438,000) (1,231,000)
Proceeds from issuance of common stock 130,000
Dividends declared (667,000) (676,000)
------------ ------------
Net cash used in financing activities (975,000) (1,811,000)
------------ ------------
EFFECT OF EXCHANGE RATE ON
CASH AND CASH EQUIVALENTS 132,000 278,000
------------ ------------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (773,000) 2,642,000
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 8,490,000 9,710,000
------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 7,717,000 $ 12,352,000
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest $ 84,000 $ 40,000
============ ============
Income taxes $ 1,039,000 $ 528,000
============ ============
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
In September 1997, the Company sold its electronic products business in
exchange for 35,000 shares of the Company's stock (valued at $534,000) and a
note receivable in the amount of $159,000.
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE> 7
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (which
comprise only normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the period ended November
28, 1998 are not necessarily indicative of the results that may be expected for
the year ending May 29, 1999. For further information, refer to the consolidated
financial statements and notes thereto for the year ended May 30, 1998.
NOTE B - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
May 30, November 28,
1998 1998
----------- -----------
<S> <C> <C>
Raw Materials $ 3,154,000 $ 2,666,000
Work in Process 1,128,000 1,334,000
Finished Products 6,168,000 5,748,000
----------- -----------
$10,450,000 $ 9,748,000
=========== ===========
</TABLE>
NOTE C - EARNINGS PER SHARE
The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
128, Earnings Per Share, which replaces the presentation of "primary" earnings
per share with "basic" earnings per share and the presentation of "fully
diluted" earnings per share with "diluted" earnings per share. All previously
reported earnings per share amounts have been restated based on the provisions
of the new standard. Basic earnings per share are based upon the weighted
average number of common shares outstanding. Diluted earnings per share amounts
are based upon the weighted average number of common and common equivalent
shares for each period presented. Common equivalent shares include stock options
assuming conversion under the treasury stock method.
7
<PAGE> 8
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE C - EARNINGS PER SHARE (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------------- -------------------------------
November 28, November 28,
1997 1998 1997 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
BASIC AND DILUTED EARNINGS
Income from continuing operations $ 1,230,000 $ 1,057,000 $ 2,345,000 $ 1,976,000
Income from disposal of segment 346,000 346,000
------------- ------------- ------------- -------------
Net income $ 1,576,000 $ 1,057,000 $ 2,691,000 $ 1,976,000
============= ============= ============= =============
COMPUTATION OF BASIC AND DILUTED SHARES
Basic Shares
Weighted Average Shares 4,769,048 4,799,205 4,780,035 4,799,205
Effect of Dilutive Options 329,610 126,534 324,684 128,424
------------- ------------- ------------- -------------
Diluted Shares
Weighted average shares plus assumed conversion
of dilutive securities 5,098,658 4,925,739 5,104,719 4,927,629
============= ============= ============= =============
EARNINGS PER SHARE
Basic EPS
Income from continuing operations $ 0.26 $ 0.22 $ 0.49 $ 0.41
Income from disposal of segment 0.07 0.07
------------- ------------- ------------- -------------
Net income $ 0.33 $ 0.22 $ 0.56 $ 0.41
============= ============= ============= =============
Diluted EPS
Income from continuing operations $ 0.24 $ 0.21 $ 0.46 $ 0.40
Income from disposal of segment 0.07 0.07
------------- ------------- ------------- -------------
Net income $ 0.31 $ 0.21 $ 0.53 $ 0.40
============= ============= ============= =============
</TABLE>
Note D - Business Segments
Haskel International, Inc. operates predominantly in one industry segment. The
Company designs and manufactures pneumatically and hydraulically driven,
high-pressure, low-flow, fixed displacement, reciprocating, liquid pumps, gas
boosters, chemical injection pumps and air pressure amplifiers. The Company also
manufactures high-pressure valves, metering valves, regulators, air operated
ventilation equipment and accessories, much of which complement the primary
products. In addition, the Company designs and manufactures integrated, or value
added systems that include the Company's products, as well as those of
third-parties. The Company sells its products through a network of industrial
distributors, direct salespersons and manufacturer's representatives. The
principal markets for the Company's products are North and South America,
Europe, and Asia-Pacific.
Geographic information for the three and six months ended November 28, 1998 and
1997 is presented in the following tables. Transfers between geographic areas
are accounted for at cost plus a profit margin. Income and expenses not
allocated to geographic areas include investment income, interest expense, and
corporate administrative costs.
Identifiable assets are those assets used exclusively in the operations in each
geographic area. Corporate assets are principally cash, cash equivalents and
deferred tax assets.
8
<PAGE> 9
PART I. FINANCIAL INFORMATION
HASKEL INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
NOTE D - BUSINESS SEGMENTS (CONTINUED)
<TABLE>
<CAPTION>
Transfers
between Sales to
Net geographic unaffiliated Operating Identifiable
sales areas customers income assets
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Six Months Ended November 29, 1998
North and South America $ 13,155,000 $ 4,340,000 $ 8,815,000 $ 1,408,000 $ 27,175,000
Europe 13,393,000 335,000 13,058,000 1,826,000 22,413,000
Asia-Pacific 3,107,000 3,107,000 713,000 1,179,000
Corporate (974,000) 9,955,000
Eliminations (4,675,000) (4,675,000) (16,698,000)
------------ ------------ ------------ ------------ ------------
$ 24,980,000 $ $ 24,980,000 $ 2,973,000 $ 44,024,000
============ ============ ============ ============ ============
Six Months Ended November 29, 1997
North and South America $ 16,067,000 $ 5,211,000 $ 10,856,000 $ 2,625,000 $ 24,570,000
Europe 11,094,000 269,000 10,825,000 1,527,000 18,558,000
Asia-Pacific 3,169,000 3,169,000 620,000 126,000
Corporate (1,101,000) 12,003,000
Eliminations (5,480,000) (5,480,000) (13,292,000)
------------ ------------ ------------ ------------ ------------
$ 24,850,000 $ $ 24,850,000 $ 3,671,000 $ 41,965,000
============ ============ ============ ============ ============
Quarter Ended November 29, 1998
North and South America $ 6,289,000 $ 2,115,000 $ 4,174,000 $ 579,000 $ 27,175,000
Europe 7,313,000 335,000 6,978,000 1,028,000 22,413,000
Asia-Pacific 1,744,000 1,744,000 437,000 1,179,000
Corporate (487,000) 9,955,000
Eliminations (2,450,000) (2,450,000) (16,698,000)
------------ ------------ ------------ ------------ ------------
$ 12,896,000 $ $ 12,896,000 $ 1,557,000 $ 44,024,000
============ ============ ============ ============ ============
Quarter Ended November 29, 1997
North and South America $ 7,981,000 $ 2,515,000 $ 5,466,000 $ 1,300,000 $ 24,570,000
Europe 5,218,000 140,000 5,078,000 693,000 18,558,000
Asia-Pacific 1,788,000 1,788,000 384,000 126,000
Corporate (511,000) 12,003,000
Eliminations (2,655,000) (2,655,000) (13,292,000)
------------ ------------ ------------ ------------ ------------
$ 12,332,000 $ $ 12,332,000 $ 1,866,000 $ 41,965,000
============ ============ ============ ============ ============
</TABLE>
9
<PAGE> 10
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Report may contain forward-looking statements that involve risks and
uncertainties. The Company's actual results and timing of certain events could
differ materially from those discussed in any forward-looking statements.
Factors that could cause or contribute to such differences include, but are not
limited to, economic conditions, the integration of acquired operations,
management of growth and other factors.
RESULTS OF OPERATIONS
Sales for the quarter ended November 28, 1998 increased $564,000, or 4.6%, to
$12,896,000, as compared with sales of $12,332,000 for the same period in the
prior year. Sales for the six months ended November 28, 1998 were $24,980,000,
as compared with sales of $24,850,000 for the same period in the prior year.
Sales for the six months ended November 28, 1997 included $678,000 in
third-party distribution sales in the United States. Distribution of these
products was eliminated in the beginning of fiscal year 1998 in order to better
concentrate sales and marketing efforts in this region on the Company's core
business products and systems. Excluding sales related to these third-party
products, sales increased $808,000, or 3.3%, in the six months ended November
28, 1998 as compared to the same period a year ago. These increases were the
result of strong sales in continental Europe and acquisitions made during fiscal
year 1998 in Europe and Australia, partially offset by a decrease in sales due
to weak economic conditions in Asia and South America and a general weakness in
the worldwide oil and gas industry. The slowdown in the Asian and South American
economies and the oil and gas sector continues to affect the Company's order
levels, and this trend is anticipated to continue over an undetermined period of
time.
Gross profit for the second quarter ended November 28, 1998 was $6,028,000, or
46.7% of sales, as compared to $6,127,000, or 49.7% of sales, for the same
period in fiscal year 1998. For the six months ended November 28, 1998, gross
profit was $11,739,000 (47% of sales) as compared to $12,098,000 (48.7% of
sales) for the same period in the prior year. The change in gross profit
percentages is the direct result of the higher mix of system sales, with average
margins of 35-40%, versus standard product sales, with average margins of
45-55%.
Selling, general and administrative, and engineering ("operating expenses")
increased $210,000, or 4.9%, for the second quarter ended November 28, 1998
compared to the same period in prior year. For the first six months of fiscal
year 1999, these expenses increased $339,000, or 4.0%, compared to the same
period in the prior year. The increase in operating expenses for the three and
six months ended November 28, 1998 is directly attributable to new businesses
acquired and opened as the Company continues to expand its operations globally.
Excluding the third-party U.S. sales as described above from fiscal year 1998,
operating expenses as a percentage of sales has remained constant at
approximately 35% of sales for all periods presented.
10
<PAGE> 11
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Income from continuing operations decreased $173,000 to $1,057,000 for the
quarter ended November 28, 1998 compared to $1,230,000 for the same period in
the prior year. For the six months ended November 28, 1998, income from
continuing operations decreased by $369,000 to $1,976,000 compared to $2,345,000
for the same period in fiscal year 1998. This decrease in earnings is directly
related to the reduced gross profit for the period as well as increased costs
related to newly acquired or opened operations.
LIQUIDITY AND SOURCES OF CAPITAL
For the six months ended November 28, 1998, net cash provided by operating
activities included $4,819,000 from continuing operations as compared to
$1,468,000 for the same period in the prior year. The increase in cash provided
by operating activities was principally due to the collection of accounts
receivable balances in the first six months of fiscal year 1999. Net cash of
$348,000 was used in discontinued operations in the first six months of fiscal
year 1998.
During the six months ended November 28, 1998 and 1997, cash used for investing
activities consisted mainly of capital expenditures. Cash used in financing
activities for the six months ended November 28, 1998 and 1997 consisted
principally of payments on long-term debt and dividends paid to shareholders.
To insure the availability of funds to meet its various needs, the Company has a
comprehensive credit facility with its bank. The credit facility includes a
$5,000,000 revolving line of credit; and a $10,000,000 line of credit available
for acquisitions or capital expenditures. At November 28, 1998, the Company had
no outstanding balances under the revolving credit or acquisition lines.
As of November 28, 1998, the Company had $12,352,000 in cash and cash
equivalents, and working capital of $26,641,000, with a ratio of current assets
to current liabilities of approximately 4.2 : 1. This compares with cash and
cash equivalents of $9,710,000, and working capital of $25,460,000, with a ratio
of current assets to current liabilities of 3.2 : 1 as of May 30, 1998. The
Company believes it has adequate resources to achieve its operating goals for at
least the next 12 month period.
YEAR 2000 COMPLIANCE
The Company is continuing the process of assessing Year 2000 issues as they
relate to its systems, business and operations. The Year 2000 issue is the
result of computer systems designed and developed using two digits rather than
four to define the applicable year. Any programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than 2000. This
could result in a major system failure or miscalculations unless corrective
measures are taken.
11
<PAGE> 12
HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The Company has developed a Year 2000 Readiness Plan to address the Year 2000
issues, particularly with respect to its critical systems. Critical systems are
those whose failure poses a risk of disruption to the Company's ability to
provide product to its customers. The Company's plan includes four core phases:
(1) establishing and initiating a master plan and schedule with key staff
members being notified of their responsibilities; (2) assessing the impact of
mission-critical system failures on core business processes by performing a
complete inventory of software on both information technology and
non-information technology systems, such as computer hardware containing
embedded technology; implementing quality assurance checks on clients and
vendors; and defining failure scenarios; (3) modification, upgrade or
replacement of hardware and software in order to meet compliance standards to be
completed by June 30, 1999; and (4) identify and document contingency plans and
establish resumption procedures for each core business process. The Company has
completed phase 1, is currently working on phases 2 and 3, and has yet to
commence phase 4.
The Company is not currently aware of any material costs or operational issues
associated with Year 2000 issues. The Company does not believe that it will
incur significant operating expenses or be required to invest heavily in
improvements to computer systems to be Year 2000 compliant. However, the Company
may experience significant unanticipated problems and costs caused by undetected
errors or defects in internal systems or Year 2000 issues with its customers or
vendors. The worst-case scenario if such problems occur would be the Company's
inability to deliver product to its customers and record revenue. If any of the
Company's customers or vendors experience Year 2000 problems with respect to
their relationship to the Company, such customers or vendors could assert claims
for damages against the Company. While the Company is not aware of any
significant Year 2000 issues for which it will not be adequately prepared ,
there can be no assurance that the Company's business, operating results, or
financial condition will not be adversely affected by issues surrounding the
Year 2000 conversion. To date, the costs incurred by the Company with respect to
Year 2000 compliance have not been material. The Company anticipates that the
majority of costs associated with Year 2000 issues will be related to ongoing,
scheduled software and hardware maintenance upgrades and licensing of phone
systems, PC operating systems, and business applications. Future anticipated
costs are difficult to estimate at the present stage of the project; however,
the Company does not currently anticipate that such costs will exceed $500,000.
12
<PAGE> 13
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On October 30, 1998, the Company held its Annual Meeting of
Shareholders (the "1998 Annual Meeting") for shareholders of record as of
September 14, 1998.
(b) At the 1998 Annual Meeting, holders of the Company's Class A Common
Stock, without par value ("Class A Common Stock"), elected three Directors, and
holders of the Company's Class B Common Stock, without par value ("Class B
Common Stock"), elected four directors.
The following individuals were elected by holders of the Company's
Class A Common Stock to serve as Directors of the Company:
R. Malcolm Greaves
Edward Malkowicz
Stanley T. Myers
The following individuals were elected by holders of the Company's
Class B Common Stock to serve as Directors of the Company:
Marvin L. Goldberger, Ph.D.
Terrence A. Noonan
John Vinke
W. Bradley Zehner II, Ph.D.
(c) Additionally, at the 1998 Annual Meeting, the shareholders approved
the Company's 1998 Long-term Performance Incentive Plan and the appointment of
Deloitte & Touche LLP, as the Company's principal independent auditors.
13
<PAGE> 14
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
1. ELECTION OF DIRECTORS:
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF
SHARES FOR SHARES AGAINST SHARES WITHHELD
---------- -------------- ---------------
CLASS A DIRECTORS
- -----------------
<S> <C> <C> <C>
R. Malcolm Greaves 4,199,257 13,118 2,979
Edward Malkowicz 4,198,157 14,218 2,979
Stanley T. Myers 4,198,157 14,218 2,979
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF NUMBER OF
SHARES FOR SHARES AGAINST SHARES WITHHELD
---------- -------------- ---------------
CLASS B DIRECTORS
- -----------------
<S> <C> <C> <C>
Terrence A. Noonan 40,000 -- --
John Vinke 40,000 -- --
Marvin L. Goldberger 40,000 -- --
W. Bradley Zehner II 40,000 -- --
</TABLE>
2. APPROVAL OF THE COMPANY'S 1998 LONG-TERM PERFORMANCE INCENTIVE PLAN:
<TABLE>
<CAPTION>
PERCENT OF
SHARES SHARES VOTING
------ -------------
<S> <C> <C>
VOTES FOR 3,162,947 74.3%
VOTES AGAINST 360,184 8.5%
VOTES ABSTAINING 170,179 4.0%
BROKER NON-VOTES
AND ABSTENTIONS 562,043 13.2%
</TABLE>
3. APPROVAL OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS:
<TABLE>
<CAPTION>
PERCENT OF
SHARES SHARES VOTING
------ -------------
<S> <C> <C>
VOTES FOR 4,243,951 99.8%
VOTES AGAINST 6,089 0.1%
VOTES ABSTAINING 5,313 0.1%
BROKER NON-VOTES
AND ABSTENTIONS -- 0.0%
</TABLE>
14
<PAGE> 15
HASKEL INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEM 5. OTHER MATTERS
(a) See Exhibit 10.31.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K):
10.31 Press Release dated October 30, 1998.
27 Financial Data Schedule
(b) The Company filed one Current Report on Form 8-K dated November 25, 1998,
during the second quarter of its fiscal year, reporting certain information
under Item 7 thereof. No financial statements were filed therewith.
15
<PAGE> 16
HASKEL INTERNATIONAL, INC.
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 thereunto duly authorized.
HASKEL INTERNATIONAL, INC.
(REGISTRANT)
DATE 1-12-99 /s/ R. MALCOLM GREAVES
------------------- ----------------------------------------
R. Malcolm Greaves
President & Chief Executive Officer
DATE 1-12-99 /s/ PATRICIA A. WEHR
------------------- ----------------------------------------
Patricia A. Wehr
Chief Financial Officer
16
<PAGE> 1
EXHIBIT 10.31
[HASKEL INTERNATIONAL INC., LOGO]
CONTACTS: R. Malcolm Greaves
President and CEO
(818) 843-4000
Gary S. Maier/Roger S. Pondel
Pondel Parsons & Wilkinson
(310) 207-9300
FOR IMMEDIATE RELEASE
HASKEL DISCUSSES STRATEGIC ALTERNATIVES AT ANNUAL MEETING
BURBANK, CALIFORNIA -- OCTOBER 30, 1998 -- Haskel International, Inc.
(Nasdaq:HSKL), at its annual meeting of shareholders today, announced further
details to its earlier disclosure that it has retained Schroder & Co., Inc., to
assist the company in evaluating business alternatives to enhance the company's
growth opportunities.
R. Malcolm Greaves, Haskel's president and chief executive officer, said
that the company is exploring with Schroder a number of alternatives, including
acquisitions that would facilitate growth; the possibility of a merger with an
equal sized company; and/or the sale of the company.
"With regard to acquisitions by Haskel of other companies, I am only able
to confirm that we are active in this area and any pending acquisition will be
announced through further news releases," Greaves said. "We are
simultaneously pursuing the possible sale of the company. These discussions,
however, remain exploratory, and no offers have been received or are being
considered."
-more-
<PAGE> 2
2-2-2
Haskel International, Inc. is one of the world's leading manufacturers of
high-pressure liquid pumps and gas boosters, specializing in high-pressure
technology and systems integration. Haskel conducts its operations through
facilities in North America, Europe and the Pacific Rim, as well as through
distributors and agents worldwide.
# # #
Certain statements contained in this press release contain forward looking
information that is subject to risks and uncertainties which could cause
actual results to differ materially from those projected or implied. Such
risks and uncertainties include, but are not limited to; the success of
implementing appropriate strategic initiatives and negotiating related
transactions to enhance shareholder value.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM HASKEL
INTERNATIONAL, INC.'S CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF
INCOME AND CONSOLIDATED STATEMENTS OF CASH FLOWS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-29-1999
<PERIOD-END> NOV-28-1998
<CASH> 12,352
<SECURITIES> 0
<RECEIVABLES> 11,602
<ALLOWANCES> 327
<INVENTORY> 9,748
<CURRENT-ASSETS> 34,852
<PP&E> 12,153
<DEPRECIATION> 6,784
<TOTAL-ASSETS> 44,024
<CURRENT-LIABILITIES> 8,211
<BONDS> 0
0
0
<COMMON> 13,941
<OTHER-SE> 67
<TOTAL-LIABILITY-AND-EQUITY> 44,024
<SALES> 24,980
<TOTAL-REVENUES> 24,980
<CGS> 13,241
<TOTAL-COSTS> 13,241
<OTHER-EXPENSES> 8,766<F1>
<LOSS-PROVISION> 93
<INTEREST-EXPENSE> 32
<INCOME-PRETAX> 3,278
<INCOME-TAX> 1,302
<INCOME-CONTINUING> 1,976
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,976
<EPS-PRIMARY> .41<F2>
<EPS-DILUTED> .40
<FN>
<F1>OTHER EXPENSES ARE COMPRISED OF SELLING, GENERAL ADMINISTRATIVE, ENGINEERING
DESIGN, RESEARCH AND DEVELOPMENT.
<F2>FOR THE PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
</FN>
</TABLE>
