-----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, NCI2Lei7khKkC39arcBkqUlVJfvo0ic8suJIpST+5gRmae5xVQ0hy6X8MQ3sCCPw 7ytImYHrJOYWQv8rXQ2ijQ== 0000950150-99-000030.txt : 19990113 0000950150-99-000030.hdr.sgml : 19990113 ACCESSION NUMBER: 0000950150-99-000030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981128 FILED AS OF DATE: 19990112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HASKEL INTERNATIONAL INC CENTRAL INDEX KEY: 0000918022 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 954107640 STATE OF INCORPORATION: CA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25068 FILM NUMBER: 99504998 BUSINESS ADDRESS: STREET 1: 100 EAST GRAHAM PL CITY: BURBANK STATE: CA ZIP: 91502 BUSINESS PHONE: 8188434000 MAIL ADDRESS: STREET 1: 100 EAST GRAHAM PLACE CITY: BURBANK STATE: CA ZIP: 91502 10-Q 1 FORM 10-Q 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. 2 INDEX HASKEL INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION PAGE 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
2 3 HASKEL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
May 30, November 28, 1998 1998 ----------- ----------- ASSETS 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 =========== ===========
See notes to consolidated financial statements. 3 4 HASKEL INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (Continued) (Unaudited)
May 30, November 28, 1998 1998 ------------ ------------ LIABILITIES & SHAREHOLDERS' EQUITY 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 ============ ============
See notes to consolidated financial statements. 4 5 HASKEL INTERNATIONAL, INC. CONSOLIDATED INCOME STATEMENTS (Unaudited)
Three Months Ended Six Months Ended November 28, November 28, 1997 1998 1997 1998 ----------- ----------- ----------- ----------- 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 =========== =========== =========== ===========
See notes to consolidated financial statements. 5 6 HASKEL INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended November 28, 1997 1998 ------------ ------------ 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 ============ ============
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 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:
May 30, November 28, 1998 1998 ----------- ----------- 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 =========== ===========
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 8 PART I. FINANCIAL INFORMATION HASKEL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE C - EARNINGS PER SHARE (CONTINUED)
Three Months Ended Six Months Ended ---------------------------------- ------------------------------- November 28, November 28, 1997 1998 1997 1998 ------------- ------------- ------------- ------------- 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 ============= ============= ============= =============
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 9 PART I. FINANCIAL INFORMATION HASKEL INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) NOTE D - BUSINESS SEGMENTS (CONTINUED)
Transfers between Sales to Net geographic unaffiliated Operating Identifiable sales areas customers income assets ------------ ------------ ------------ ------------ ------------ 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 ============ ============ ============ ============ ============
9 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 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 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 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 14 HASKEL INTERNATIONAL, INC. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 1. ELECTION OF DIRECTORS:
NUMBER OF NUMBER OF NUMBER OF SHARES FOR SHARES AGAINST SHARES WITHHELD ---------- -------------- --------------- CLASS A DIRECTORS - ----------------- 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
NUMBER OF NUMBER OF NUMBER OF SHARES FOR SHARES AGAINST SHARES WITHHELD ---------- -------------- --------------- CLASS B DIRECTORS - ----------------- Terrence A. Noonan 40,000 -- -- John Vinke 40,000 -- -- Marvin L. Goldberger 40,000 -- -- W. Bradley Zehner II 40,000 -- --
2. APPROVAL OF THE COMPANY'S 1998 LONG-TERM PERFORMANCE INCENTIVE PLAN:
PERCENT OF SHARES SHARES VOTING ------ ------------- 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%
3. APPROVAL OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS:
PERCENT OF SHARES SHARES VOTING ------ ------------- 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%
14 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 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 EX-10.31 2 PRESS RELEASE DATED OCTOBER 30, 1998 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- 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. EX-27 3 FINANCIAL DATA SCHEDULE
5 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. 6-MOS MAY-29-1999 NOV-28-1998 12,352 0 11,602 327 9,748 34,852 12,153 6,784 44,024 8,211 0 0 0 13,941 67 44,024 24,980 24,980 13,241 13,241 8,766 93 32 3,278 1,302 1,976 0 0 0 1,976 .41 .40 OTHER EXPENSES ARE COMPRISED OF SELLING, GENERAL ADMINISTRATIVE, ENGINEERING DESIGN, RESEARCH AND DEVELOPMENT. FOR THE PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
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