-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QNNqApgd24Qqa09HlhmBTNXkTNjbZQ8EpY1L5yP+YfPfW3bobTtICH1EMKiBiwPP XKQk9LwueDH+TcwyJV1how== 0000046709-00-000004.txt : 20000502 0000046709-00-000004.hdr.sgml : 20000502 ACCESSION NUMBER: 0000046709-00-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELIX TECHNOLOGY CORP CENTRAL INDEX KEY: 0000046709 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 042423640 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06866 FILM NUMBER: 615473 BUSINESS ADDRESS: STREET 1: NINE HAMPSHIRE STREET STREET 2: NINE HAMPSHIRE ST CITY: MANSFIELD STATE: MA ZIP: 02048 BUSINESS PHONE: 5083375111 MAIL ADDRESS: STREET 1: NINE HAMPSHIRE STREET CITY: MANSFIELD STATE: MA ZIP: 02048 FORMER COMPANY: FORMER CONFORMED NAME: CRYOGENIC TECHNOLOGY INC DATE OF NAME CHANGE: 19760707 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2000 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 --------------------------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the Quarter Ended March 31, 2000. OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from_______ to _______ Commission File Number 0-6866 HELIX TECHNOLOGY CORPORATION ---------------------------- (Exact name of registrant as specified in its charter) Delaware 04-2423640 ------------------------ --------------------------------- (State of incorporation) (IRS Employer Identification No.) Mansfield Corporate Center Nine Hampshire Street Mansfield, Massachusetts 02048-9171 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (508) 337-5111 ------------------------------- Indicate by checkmark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days. Yes [X] No [ ] The number of shares outstanding of the registrant's Common Stock, $1 par value, as of March 31, 2000 was 22,598,704. HELIX TECHNOLOGY CORPORATION Form 10-Q INDEX Page Part I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999......................................................3 Consolidated Statements of Operations for the Three-Month Periods Ended March 31, 2000 and April 2, 1999.................................4 Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2000 and April 2, 1999.........................5 Consolidated Statements of Comprehensive Income for the Three-Month Periods Ended March 31, 2000 and April 2, 1999.............6 Notes to Consolidated Financial Statements.............................7-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........10-12 Item 3. Quantitative and Qualitative Disclosures about Market Risk ............................................13 Part II. OTHER INFORMATION Item 1. Legal Proceedings.......................................14 Item 6 (a). Exhibits................................................14 Item 6 (b). Reports on Form 8-K.....................................14 Signature...............................................................15 HELIX TECHNOLOGY CORPORATION CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------------------- Mar. 31, 2000 Dec. 31, 1999 (in thousands except per share data) (unaudited) (audited) - --------------------------------------------------------------------------------------------- ASSETS Current: Cash and cash equivalents $ 8,432 $ 11,408 Investments (Note 2) 16,085 15,912 Receivables - net of allowances 28,432 19,479 Inventories (Note 3) 18,850 18,442 Deferred income taxes (Note 4) 7,040 7,040 Other current assets 1,399 1,626 - --------------------------------------------------------------------------------------------- Total Current Assets 80,238 73,907 - --------------------------------------------------------------------------------------------- Property, plant and equipment at cost 40,730 38,724 Less: accumulated depreciation (28,955) (28,093) - --------------------------------------------------------------------------------------------- Net property, plant and equipment 11,775 10,631 Other assets 9,704 9,117 - --------------------------------------------------------------------------------------------- TOTAL ASSETS $101,717 $ 93,655 ============================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current: Accounts payable $ 11,515 $ 8,490 Payroll and compensation 1,523 4,768 Retirement costs 4,822 4,561 Income taxes (Note 4) 6,706 3,238 Other accrued liabilities 934 975 - --------------------------------------------------------------------------------------------- Total Current Liabilities 25,500 22,032 - --------------------------------------------------------------------------------------------- Commitments - - Stockholders' Equity: Preferred stock, $1 par value; authorized 2,000,000 shares; issued and outstanding: none - - Common stock, $1 par value; authorized 60,000,000 shares; issued and outstanding: 22,598,704 in 2000 and 22,375,631 in 1999 22,599 22,376 Capital in excess of par value 13,490 9,314 Treasury stock, $1 par value (85,541 shares in 2000 and 11,602 shares in 1999) (5,324) (198) Retained earnings 44,320 39,063 Accumulated other comprehensive income 1,132 1,068 - --------------------------------------------------------------------------------------------- Total Stockholders' Equity 76,217 71,623 - --------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $101,717 $ 93,655 ============================================================================================= The accompanying notes are an integral part of these financial statements.
Page 3 HELIX TECHNOLOGY CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
- ------------------------------------------------------------------------------------- Three Months Ended (in thousands except per share data) Mar. 31, 2000 Apr. 2, 1999 - ------------------------------------------------------------------------------------- Net sales $50,050 $25,900 - ------------------------------------------------------------------------------------- Costs and expenses: Cost of sales 25,948 15,111 Research and development 3,275 2,066 Selling, general and administrative 9,788 7,157 - ------------------------------------------------------------------------------------- 39,011 24,334 - ------------------------------------------------------------------------------------- Operating income 11,039 1,566 Joint venture income 542 137 Interest and other income 297 236 - ------------------------------------------------------------------------------------- Income before taxes 11,878 1,939 Income taxes (Note 4) 3,920 679 - ------------------------------------------------------------------------------------- Net income $ 7,958 $ 1,260 ===================================================================================== Net income per share: Basic (Note 5) $ 0.36 $ 0.06 Diluted (Note 5) $ 0.35 $ 0.06 ===================================================================================== Number of shares used in per share calculations: Basic (Note 5) 22,419 22,307 Diluted (Note 5) 22,899 22,472 ===================================================================================== The accompanying notes are an integral part of these financial statements.
Page 4 HELIX TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
- --------------------------------------------------------------------------------------------- Three Months Ended (in thousands) Mar. 31, 2000 Apr. 2, 1999 - --------------------------------------------------------------------------------------------- Cash flows from operating activities: Net income $ 7,958 $ 1,260 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 974 1,022 Other (351) 8 Net change in operating assets and liabilities (A) (2,598) (1,175) - --------------------------------------------------------------------------------------------- Net cash provided by operating activities 5,983 1,115 - --------------------------------------------------------------------------------------------- Cash flows from investing activities: Capital expenditures (2,118) (582) Purchase of investments (4,814) (3,828) Sale of investments 4,663 3,661 - --------------------------------------------------------------------------------------------- Net cash used by investing activities (2,269) (749) - --------------------------------------------------------------------------------------------- Cash flows from financing activities: Shares tendered for exercise of stock options (5,167) - Net cash provided by employee stock plans 1,178 - Cash dividends paid (2,701) (2,674) - --------------------------------------------------------------------------------------------- Net cash used by financing activities (6,690) (2,674) - --------------------------------------------------------------------------------------------- Decrease in cash and cash equivalents (2,976) (2,308) Cash and cash equivalents, at the beginning of the period 11,408 8,843 - --------------------------------------------------------------------------------------------- Cash and cash equivalents, at the end of the period $ 8,432 $ 6,535 ============================================================================================= (A) Change in operating assets and liabilities: (Increase) in accounts receivable $(8,953) $(3,772) (Increase) in inventories (408) (37) Decrease/(increase) in other current assets 227 (185) Increase in accounts payable 3,025 1,749 Increase in other accrued expenses 3,511 1,070 - --------------------------------------------------------------------------------------------- Net change in operating assets and liabilities $(2,598) $(1,175) ============================================================================================= The accompanying notes are an integral part of these financial statements.
Page 5 HELIX TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
- --------------------------------------------------------------------------------------------- Three Months Ended (in thousands) Mar. 31, 2000 Apr. 2, 1999 - --------------------------------------------------------------------------------------------- Net income $7,958 $1,260 - --------------------------------------------------------------------------------------------- Other comprehensive income before tax: Foreign currency translation adjustment 142 1,223 Unrealized gain on available-for-sale investment 21 1 - --------------------------------------------------------------------------------------------- Other comprehensive income, before tax 163 1,224 Income tax related to items of other comprehensive income (99) (453) - --------------------------------------------------------------------------------------------- Other comprehensive income, net of tax 64 771 - --------------------------------------------------------------------------------------------- Comprehensive income $8,022 $2,031 =============================================================================================
Page 6 HELIX TECHNOLOGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Basis of Presentation - ------------------------------ In the opinion of the Company, the accompanying consolidated financial statements for the periods ended March 31, 2000, and April 2, 1999, contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2000, and December 31, 1999, and the results of operations and cash flows for the periods ended March 31, 2000, and April 2, 1999. The results of operations for the three-month period ended March 31, 2000, are not necessarily indicative of the results expected for the full year. The consolidated financial statements included herein have been prepared by the Company, without audit of the three-month periods ended March 31, 2000, and April 2, 1999, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to present fairly the Company's financial position and results of operations. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest Annual Report on Form 10-K. Note 2 - Investments - -------------------- The Company had investments of $16,085,000 and $15,912,000 as of March 31, 2000, and December 31, 1999, respectively. The investments were classified as "available-for-sale," and the difference between the cost and fair value of these investments was immaterial and is included in other comprehensive income. Note 3 - Inventories - -------------------- - ------------------------------------------------------------------ (in thousands) Mar. 31, 2000 Dec. 31, 1999 - ------------------------------------------------------------------ Finished goods $ 5,064 $ 5,157 Work in process 9,569 8,716 Materials and parts 4,217 4,569 - ------------------------------------------------------------------ $18,850 $18,442 ================================================================== Inventories are stated at the lower of cost or market on a first-in, first-out basis. Page 7 HELIX TECHNOLOGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 4 - Income Taxes - --------------------- The net federal, state and foreign income tax provisions were $3,920,000 for the three-month period ended March 31, 2000 and $679,000 for the three-month period ended April 2, 1999. Tax credits are treated as reductions of income tax provisions in the year in which the credits are realized. The Company does not provide for federal income taxes on the undistributed earnings of its wholly owned foreign subsidiaries, since these earnings are indefinitely reinvested. The effective income tax rate for the three-month periods ended March 31, 2000, and April 2, 1999, was 33% and 35%, respectively. The major components of deferred tax assets are compensation and benefit plans, inventory valuation and depreciation, respectively. Based on past experience, the Company expects that the future taxable income will be sufficient for the realization of the deferred tax assets. The Company believes that a valuation allowance is not required. Note 5 - Net Income Per Share - ----------------------------- Basic net income per common share is based on the weighted average number of common shares outstanding during the period. Diluted net income per common share reflects the potential dilution that could occur if outstanding stock options were exercised. The following table sets forth the computation of basic and diluted net income per common share: - ------------------------------------------------------------------------- Three Months Ended (in thousands except per share data) Mar. 31, 2000 Apr. 2, 1999 - ------------------------------------------------------------------------- Net income $ 7,958 $ 1,260 ========================================================================= Basic shares 22,419 22,307 Add: Common equivalent shares (1) 480 165 - ------------------------------------------------------------------------- Diluted shares 22,899 22,472 ========================================================================= Basic net income per share $ 0.36 $ 0.06 ========================================================================= Diluted net income per share $ 0.35 $ 0.06 ========================================================================= (1) Common equivalent shares represent shares issuable upon conversion of stock options (using the treasury stock method). The Company had no stock options that were anti-dilutive as of the first quarter of 2000. The Company had 597,000 options outstanding not included in the computation of diluted shares for the first quarter of 1999, because the option price was greater than the average market price of the common shares. Page 8 HELIX TECHNOLOGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 6 - New Accounting Pronouncements - -------------------------------------- In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments, including some derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. The Company will adopt SFAS 133 in 2001, in accordance with SFAS 137, which deferred the effective date of SFAS 133. The adoption of this standard in 2001 is not expected to have a material impact on the Company's consolidated financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements." SAB 101 summarizes the staff's view in applying generally accepted accounting principles to selected revenue recognition issues. The application of the guidance in SAB 101 will be required in the second quarter of 2000. The Company has evaluated the application of SAB 101 and determined that it will have no material impact. Page 9 HELIX TECHNOLOGY CORPORATION PART I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - --------------------- Throughout 1999, the global semiconductor capital equipment industry experienced a rapid recovery from the significant worldwide downturn that occurred in 1998. This positive industry trend continued into the first quarter of 2000. As a result, net sales for the first quarter ended March 31, 2000, (the "2000 Quarter") were $50.1 million compared with net sales for the first quarter ended April 2, 1999, (the "1999 Quarter") of $25.9 million, an increase of 93.2%. The gross profit percentage for the 2000 Quarter was 48.2% compared with 41.7% for the 1999 Quarter. The improvement in gross margin was primarily attributable to increased production volume and the related decrease in manufacturing unit costs. Research and development expenses were $3.3 million for the 2000 Quarter or 6.5% of net sales compared to $2.1 million or 8.0% of net sales for the 1999 Quarter. As industry conditions improved during the past five quarters, the Company increased its spending on projects that meet near-term customer requirements. The Company expects to spend approximately $14.0 million to $15.0 million on research and development in 2000. Total selling, general and administrative expenses were $9.8 million and increased by $2.6 million in the 2000 Quarter compared with the 1999 Quarter. The increase in spending is primarily attributable to expenditures to support increased sales activities worldwide, including expansion of the Company's sales and service location in Japan and initial costs relating to a sales and service location in Taiwan. Operating income was $11.0 million and increased $9.5 million in the 2000 Quarter compared with the 1999 Quarter. The primary reasons for the increase are higher net sales, decreases in manufacturing unit costs and spending growth that was lower than sales growth. For the 2000 Quarter, the Company had pretax income of $11.9 million resulting in a tax provision of $3.9 million compared to a pretax income of $1.9 million and a tax provision of $0.7 million for the 1999 Quarter. The effective tax rate was 33% for the 2000 Quarter. The effective tax rate was 33% for the full year 1999. Liquidity and Capital Resources - ------------------------------- Cash provided by operating activities for the 2000 Quarter was $6.0 million compared with $1.1 million for the 1999 Quarter, primarily due to the increase in net income. The Company's normal annual capital needs are approximately $4.0 million to $5.0 million. However, in 2000 the Company has four major initiatives that will result in capital spending of approximately Page 10 HELIX TECHNOLOGY CORPORATION PART I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Liquidity and Capital Resources (continued) - ------------------------------- $10.0 million. These initiatives are: consolidation of its Colorado operations into a new 60,000 square foot leased facility, the first phase of a new corporate information system, its GOLDLink global support operations center and the opening of a sales and service location in Taiwan. Cash used by investing activities was $2.3 million during the 2000 Quarter, primarily due to increased capital expenditures related to the planned consolidation of the Company's Colorado operations into a new facility. Cash dividends paid to stockholders during both the 2000 Quarter and the 1999 Quarter were $2.7 million. The Company believes that existing cash, cash equivalents, investment balances and anticipated cash flow from operations will be adequate to fund operations and its capital expenditure program for the foreseeable future and that it has opportunities to consider further financing options should additional funds be required. New Accounting Pronouncements - ----------------------------- In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments, including some derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. The Company will adopt SFAS 133 in 2001, in accordance with SFAS 137, which deferred the effective date of SFAS 133. The adoption of this standard in 2001 is not expected to have a material impact on the Company's consolidated financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements." SAB 101 summarizes the staff's view in applying generally accepted accounting principles to selected revenue recognition issues. The application of the guidance in SAB 101 will be required in the Company's second quarter of 2000. The Company has evaluated the application of SAB 101 and determined that it will have no material impact. Page 11 HELIX TECHNOLOGY CORPORATION PART I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Certain Factors That May Affect Future Results - ---------------------------------------------- From time to time, information provided by the Company, statements made by its employees or information included in its filings with the Securities and Exchange Commission may contain statements that are not historical facts but that are "forward-looking statements" involving risks and uncertainties. In particular, statements in "Management's Discussion and Analysis of Financial Condition and Results of Operations" relating to the Company's shipment levels, profitability, sufficiency of capital to meet working capital and capital expenditure requirements may be forward-looking statements. The words "expect," "anticipate," "internal," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements. Such statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that could cause the Company's future results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Many such factors are beyond the Company's ability to control or predict. Readers are accordingly cautioned not to place undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly any forward-looking statements, whether in response to new information or future events or otherwise. Important factors that may cause the Company's actual results to differ from such forward-looking statements include, but are not limited to, the factors discussed below. The Company's business depends in large part upon the capital expenditures of semiconductor manufacturers, which, in turn, depend on the current and anticipated market demand for integrated circuits and products utilizing integrated circuits. The semiconductor industry is highly cyclical and has historically experienced periodic downturns, which generally have had a severe effect on the semiconductor industry's demand for capital equipment and have adversely affected the Company's results of operations. There can be no assurance that developments in the semiconductor industry or the semiconductor equipment industry will occur at the rate or in the manner expected by the Company. In addition to the cyclical nature, risks and uncertainties of the semiconductor industry, the Company faces the following risks and uncertainties among others: the need to continuously develop, manufacture and gain customers' acceptance of new products and product enhancements; dependence on a limited number of customers and concentration of sales to one or a few customers; the Company's ability to attract and retain certain key personnel; the ability of the Company to protect its technology assets by obtaining and enforcing patents; and dependence on sole and limited source suppliers for certain components and subassemblies included in the Company's products and systems. As a result of the foregoing and other factors, the Company may experience material fluctuations in its future operating results on a quarterly or annual basis which could materially affect its business, financial position, results of operations and stock price. Page 12 HELIX TECHNOLOGY CORPORATION PART I Item 3. Quantitative and Qualitative Disclosures about Market Risk There have been no significant changes in the Company's market risks since the year ended December 31, 1999. For more information please read the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Page 13 HELIX TECHNOLOGY CORPORATION PART II. OTHER INFORMATION Item 1. Legal Proceedings In the normal course of business, the Company is subject to various legal proceedings and claims. The Company is a defendant in an action brought by Raytheon Company claiming damages from the sale of allegedly defective components by the Company to Raytheon, which the Company no longer sells. The Company believes that it has meritorious defenses to the claims and that, although the outcome of the action cannot be predicted with certainty, the disposition of the claim should not have a material effect on the financial position of the Company. Item 6(a). Exhibits 27.1 Financial Data Schedule (EDGAR version only). Item 6(b). Reports on Form 8-K The Company did not file any Current Report on Form 8-K during the quarter ended March 31, 2000. Page 14 HELIX TECHNOLOGY CORPORATION Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HELIX TECHNOLOGY CORPORATION (Registrant) May 1, 2000 By: /s/Michael El-Hillow - --------------------- -------------------------- Date Michael El-Hillow Senior Vice President Chief Financial Officer Page 15 EX-27 2 FDS
5 1000 3-MOS DEC-31-2000 MAR-31-2000 8,432 16,085 28,612 180 18,850 80,238 40,730 28,955 101,717 25,500 0 0 0 22,599 53,618 101,717 50,050 50,050 25,948 13,063 (839) 0 0 11,878 3,920 7,958 0 0 0 7,958 0.36 0.35
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