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 June 28, 1996.
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 [ ]
Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock as of the latest practicable date.
Class of Common Stock Outstanding at June 28, 1996
$1.00 par value 9,874,736 Shares
HELIX TECHNOLOGY CORPORATION
Form 10-Q
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements 3-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 9
Item 6 (a). Exhibits 10
Item 6 (b). Reports on Form 8-K 10
Signature 11
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
June 28, 1996 Dec. 31, 1995
(in thousands) (unaudited) (audited)
ASSETS
Current:
Cash and cash equivalents $ 26,904 $ 21,697
Receivables - net of allowances 18,441 17,974
Inventories (Note 4) 11,525 12,122
Deferred income taxes (Note 3) 3,039 3,039
Other current assets 706 556
Total Current Assets 60,615 55,388
Property, plant and equipment at cost 26,263 25,387
Less: accumulated depreciation (18,292) (17,061)
Net property, plant and equipment 7,971 8,326
Other assets 5,573 5,360
TOTAL ASSETS $ 74,159 $ 69,074
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 6,157 $ 6,558
Payroll and compensation 3,618 3,755
Retirement costs 1,782 1,359
Income taxes 1,912 4,756
Other accrued liabilities 432 705
Total Current Liabilities 13,901 17,133
Deferred income taxes (Note 3) 388 388
Commitments - -
Stockholders' Equity:
Preferred stock, $1 par value; authorized
2,000,000 shares; issued and outstanding: none - -
Common stock, $1 par value; authorized 30,000,000
shares; issued and outstanding: 9,926,144 in
1996 and 9,776,944 in 1995 9,926 9,777
Capital in excess of par value 5,094 3,659
Treasury stock (51,408 shares) (1,977) -
Currency translation adjustment 980 1,307
Retained earnings 45,847 36,810
Total Stockholders' Equity 59,870 51,553
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 74,159 $ 69,074
The accompanying notes are an integral part of these financial statements.
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HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
For the three and six-month periods ended June 28, 1996 and June 30, 1995
(unaudited)
(in thousands except per share data)
June 28, 1996 June 30, 1995
Three Six Three Six
Months Months Months Months
Net Sales $39,351 $79,557 $29,030 $56,184
Costs and expenses:
Cost of sales 20,580 41,819 16,120 31,190
Research and development 1,971 3,598 1,106 2,228
Selling, general and
administrative 5,541 11,630 4,356 9,034
28,092 57,047 21,582 42,452
Operating income 11,259 22,510 7,448 13,732
Joint venture income 351 752 370 878
Other 316 536 92 182
Income before taxes 11,926 23,798 7,910 14,792
Income taxes (Note 3) 4,401 8,883 2,927 5,473
Net income $ 7,525 $14,915 $ 4,983 $ 9,319
Net income per common share $ 0.75 $ 1.49 $ 0.50 $ 0.93
Average shares and equivalents 10,021 10,014 10,016 10,003
The accompanying notes are an integral part of these financial statements.
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HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the 26 weeks ended
(in thousands) June 28, 1996 June 30, 1995
Cash flows from operating activities:
Net income $14,915 $ 9,319
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 1,748 1,207
Undistributed earnings of joint venture, other (540) (257)
Net change in operating assets and liabilities (A) (2,477) (1,484)
Net cash provided by operating activities 13,646 8,785
Cash flows from investing activities:
Capital expenditures (1,393) (1,600)
Net cash used by investing activities (1,393) (1,600)
Cash flows from financing activities:
Decrease in capital lease obligations - (24)
Shares tendered for exercise of stock options (1,977) (2,553)
Net cash provided by employee stock plans 809 692
Cash dividends paid (5,878) (2,133)
Net cash used by financing activities (7,046) (4,018)
Increase in cash and cash equivalents 5,207 3,167
Cash and cash equivalents, at the beginning of
the period 21,697 8,050
Cash and cash equivalents, at the end of
the period $26,904 $11,217
(A) Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $ (467) $ (237)
(Increase)/decrease in inventories 597 (2,705)
(Increase)/decrease in other current assets (150) -
Increase/(decrease) in accounts payable (401) 918
Increase/(decrease) in other accrued expenses (2,056) 540
Net change in operating assets and liabilities $(2,477) $(1,484)
The accompanying notes are an integral part of these financial statements.
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HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1
In the opinion of the Company, the accompanying consolidated financial
statements for the periods ended June 28, 1996, and June 30, 1995, contain
all adjustments (consisting only of normal recurring adjustments) necessary
to present fairly the financial position as of June 28, 1996, and
December 31, 1995, and the results of operations and cash flows for the
periods ended June 28, 1996 and June 30, 1995.
The results of operations for the six-month period ended June 28, 1996, are
not necessarily indicative of the results expected for the full year.
The condensed financial statements included herein have been prepared by
the Company, without audit of the six-month periods ended June 28, 1996,
and June 30, 1995, 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. These condensed 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. Certain reclassifications
have been made to prior years' consolidated statements of cash flow to
conform with the current presentation.
Note 2
Net Income Per Common Share
Net income per common share is based upon the weighted average number of
common shares and common share equivalents outstanding during the periods,
as determined by use of the treasury stock method. Primary and fully-
diluted net income per common share are essentially the same for the
periods presented.
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HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3
Income Taxes
The federal, state and foreign income tax provisions of $8,883,000 and
$5,473,000 for the six-month periods ended June 28, 1996, and June 30,
1995, respectively, reflect the effects of various available tax credits.
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 United
States taxes on the undistributed earnings of its wholly owned foreign
subsidiaries.
A certain level of export income of the Company's Foreign Sales Corporation
(FSC) is permanently exempt from federal income tax; accordingly, the
income tax provisions for the six-month periods ended June 28, 1996, and
June 30, 1995, include the federal tax benefit on export income of the FSC.
The effective income tax rate for the six-month periods ended June 28,
1996, and June 30, 1995, was 37.33% and 37.0%, respectively.
The major components of deferred tax assets and liabilities are inventory
valuation, compensation 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 4
Inventories
(in thousands) June 28, 1996 Dec. 31, 1995
Finished goods $ 4,176 $ 3,870
Work in process 6,620 7,340
Materials and parts 729 912
Net inventories $11,525 $12,122
Inventories are stated at the lower of cost of market on a first-in, first-
out basis.
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HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the quarter were $39.4 million compared with $29.0 million a
year ago, an increase of 36%. Net sales for the six-month period were
$79.6 million compared with $56.2 million in the first half of 1995, an
increase of 42%. The growth in revenues resulted primarily from increased
sales of the Company's products and services used principally by
semiconductor manufacturers worldwide.
Gross profit percentage for the quarter was 47.7% compared with 44.5% a
year ago. Gross profit percentage for the first half of 1996 was 47.4%
versus 44.5% for the first half of 1995.
Research and development expenditures increased $1.4 million in the first
half of 1996 compared with the same period last year. Total Selling,
general and administrative expense increased by $2.6 million in the first
half of 1996 versus the first half of 1995.
Operating income increased by $3.8 million compared with the second quarter
of 1995. Operating income for the first six months of 1996 increased by
$8.8 million compared with the same period a year ago. Higher sales
coupled with continuing investments to improve operational efficiencies are
the primary reasons for the increase in operating income.
The Company's provision for income taxes was $8.9 million and $5.5 million
for the first half of 1996 and 1995, respectively. The effective tax rate
for the first half of 1996 was 37.33% versus 37.0% for the first half of
1995. The difference between the statutory federal rate and the Company's
effective tax rate is due to state and foreign income taxes.
Liquidity and Capital Resources
Cash provided by operating activities for the first half of 1996 was
$13.6 million compared with $8.8 million for the comparable period last
year.
The Company has informal bank lines of credit available under various short-
term borrowing agreements totaling $12.0 million. There were no borrowings
under these agreements at the end of the first half of 1996.
Cash dividends paid to stockholders during the first half of 1996 were
$5.9 million.
The Company believes anticipated cash flow from operations and funds
available under existing credit lines will be adequate to meet its
anticipated requirements.
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HELIX TECHNOLOGY CORPORATION
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Stockholders was held on
April 24, 1996. Proposal I submitted to a vote of security holders at the
meeting was the election of Directors. The following Directors, being all
the Directors of the Corporation, were elected at the meeting, with the
number of votes cast for each Director or withheld from each Director being
set forth after his respective name:
Name Votes For Votes Withheld
R. Schorr Berman 8,827,723 33,332
Frank Gabron 8,827,553 33,502
Milton C. Lauenstein 8,435,015 426,040
Robert J. Lepofsky 8,809,253 51,802
Marvin G. Schorr 8,823,585 37,470
Wickham Skinner 8,821,388 39,667
Mark S. Wrighton 8,826,513 34,542
No abstentions or broker non-votes were recorded.
Proposal II submitted to a vote of security holders at the meeting was the
adoption of the 1996 Equity Incentive Plan. Votes cast were as follows:
For Against Abstain No Vote
5,350,077 1,248,353 167,750 2,094,875
The proposal was approved.
Proposal III submitted to a vote of security holders at the meeting was the
adoption of the 1996 Non-Employee Directors' Stock Option Plan. Votes cast
were as follows:
For Against Abstain No Vote
6,234,563 344,559 186,154 2,095,779
The proposal was approved.
Proposal IV submitted to a vote of security holders at the meeting was the
appointment of Coopers & Lybrand, L.L.P. as the Company's independent
accountants for fiscal year 1996.
For Against Abstain No Vote
8,807,014 25,439 28,599 3
The proposal was approved.
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HELIX TECHNOLOGY CORPORATION
PART II. OTHER INFORMATION
Item 6(a). Exhibits
4A Description of Common Stock (incorporated herein, by
reference to Exhibit 3 to the Form 10-Q for the quarter
ended September 30, 1988).
4B Description of Preferred Stock (incorporated herein, by
reference to Exhibit 3 to the Form 10-Q for the quarter
ended September 30, 1988).
27 Financial Data Schedule (EDGAR version only)
Item 6(b). Reports on Form 8-K
No Form 8-K was required to be filed during the quarter ended
June 28, 1996.
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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)
Date: July 15, 1996 By: Stephen D. Allison
Vice President and
Chief Financial Officer
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