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 27, 1997.
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 27, 1997
$1.00 par value 9,883,803 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 8-9
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 6 (a). Exhibits 11
Item 6 (b). Reports on Form 8-K 11
Signature 12
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
June 27, 1997 Dec. 31, 1996
(in thousands) (unaudited) (audited)
ASSETS
Current:
Cash and cash equivalents $ 29,844 $ 29,378
Receivables - net of allowances 17,155 11,525
Inventories (Note 4) 10,506 12,370
Deferred income taxes (Note 3) 3,414 3,414
Other current assets 992 842
Total Current Assets 61,911 57,529
Property, plant and equipment at cost 24,291 24,219
Less: accumulated depreciation (15,839) (15,837)
Net property, plant and equipment 8,452 8,382
Other assets 6,020 5,848
TOTAL ASSETS $ 76,383 $ 71,759
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 5,915 $ 4,780
Payroll and compensation 2,979 3,438
Retirement costs 2,630 2,212
Income taxes 1,617 1,049
Other accrued liabilities 402 442
Total Current Liabilities 13,543 11,921
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: 9,893,203 in
1997 and 9,862,590 in 1996 9,893 9,863
Capital in excess of par value 4,704 3,162
Treasury stock (9,400 shares) (340) -
Currency translation adjustment 240 833
Retained earnings 48,343 45,980
Total Stockholders' Equity 62,840 59,838
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 76,383 $ 71,759
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 27, 1997 and June 28, 1996
(unaudited)
(in thousands except per share data)
June 27, 1997 June 28, 1996
Three Six Three Six
Months Months Months Months
Net Sales $32,931 $61,953 $39,351 $79,557
Costs and expenses:
Cost of sales 17,501 33,060 20,580 41,819
Research and development 2,347 4,222 1,971 3,598
Selling, general and
administrative 6,034 11,779 5,541 11,630
25,882 49,061 28,092 57,047
Operating income 7,049 12,892 11,259 22,510
Joint venture income 601 915 351 752
Interest income 373 718 309 588
Other (22) (27) 7 (52)
Income before taxes 8,001 14,498 11,926 23,798
Income taxes (Note 3) (2,880) (5,219) (4,401) (8,883)
Net income $ 5,121 $ 9,279 $ 7,525 $14,915
Net income per common share $ 0.51 $ 0.93 $ 0.75 $ 1.49
Average shares and equivalents 9,974 9,968 10,021 10,014
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 six months ended
(in thousands) June 27, 1997 June 28, 1996
Cash flows from operating activities:
Net income $ 9,279 $14,915
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation 1,525 1,748
Undistributed earnings of joint venture, other (765) (540)
Net change in operating assets and liabilities (A) (1,055) (2,477)
Net cash provided by operating activities 8,984 13,646
Cash flows from investing activities:
Capital expenditures (1,595) (1,393)
Net cash used by investing activities (1,595) (1,393)
Cash flows from financing activities:
Shares tendered for exercise of stock options (311) (1,977)
Net cash provided by employee stock plans 303 809
Cash dividends paid (6,915) (5,878)
Net cash used by financing activities (6,923) (7,046)
Increase in cash and cash equivalents 466 5,207
Cash and cash equivalents, at the beginning of
the period 29,378 21,697
Cash and cash equivalents, at the end of
the period $29,844 $26,904
(A) Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable $(5,630) $ (467)
(Increase)/decrease in inventories 1,864 597
(Increase)/decrease in other current assets (150) (150)
Increase/(decrease) in accounts payable 1,135 (401)
Increase/(decrease) in other accrued expenses 1,726 (2,056)
Net change in operating assets and liabilities $(1,055) $(2,477)
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 27, 1997, and June 28, 1996, contain
all adjustments (consisting only of normal recurring adjustments) necessary
to present fairly the financial position as of June 27, 1997, and
December 31, 1996, and the results of operations and cash flows for the
periods ended June 27, 1997, and June 28, 1996.
The results of operations for the six-month period ended June 27, 1997, 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 27, 1997,
and June 28, 1996, 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.
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 $5,219,000 and
$8,883,000 for the six-month periods ended June 27, 1997, and June 28,
1996, 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 27, 1997, and
June 28, 1996, include the federal tax benefit on export income of the FSC.
The effective income tax rate for the six-month periods ended June 27,
1997, and June 28, 1996, was 36.0% and 37.33%, respectively.
The major components of deferred tax assets and liabilities are inventory
valuation, compensation and leases, 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 27, 1997 Dec. 31, 1996
Finished goods $ 3,499 $ 3,854
Work in process 6,714 7,655
Materials and parts 293 861
Net inventories $10,506 $12,370
Inventories are stated at the lower of cost or 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
Revenues for the quarter were $32.9 million compared with $39.4 million a
year ago, a decrease of 16%. Revenues for the six-month period were
$62.0 million compared with $79.6 million in the first half of 1996, a
decrease of 22%. This decline in revenues is a result of a slowdown in the
global market for semiconductor capital equipment which began during the
second half of 1996. Revenues for the second quarter were up $3.9 million or
13% when compared to the first quarter of 1997.
Gross profit percentage for the quarter was 46.9% compared with 47.7% a year
ago and 46.4% for the preceding quarter. Gross profit percentage for the
first half of 1997 was 46.6% versus 47.4% for the first half of 1996. The
Company's flexible manufacturing strategies and on-going cost reduction
initiatives have resulted in continued strong gross profit performance,
despite the year to year reduction in sales.
Research and development expenditures increased $.6 million in the first half
of 1997 compared with the same period last year as the Company continues to
introduce new products. Total Selling, general and administrative expense
increased by $.1 million in the first half of 1997 versus the first half of
1996.
Operating income decreased $4.2 million compared with the second quarter of
1996. Operating income for the first six months of 1997 decreased by
$9.6 million compared with the same period a year ago. The decrease in
operating income was due to lower revenue levels.
The Company's provision for income taxes was $5.2 million and $8.9 million
for the first half of 1997 and 1996, respectively. The effective tax rate
for the first half of 1997 was 36.0% versus 37.33% for the first half of
1996. 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 1997 was
$9.0 million compared with $13.6 million for the comparable period last year.
The Company's informal bank lines of credit amount to $12.0 million. There
were no borrowings under these agreements during 1997 or 1996.
Cash dividends paid to stockholders during the first half of 1997 were
$6.9 million compared with $5.9 million for the first half of 1996.
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HELIX TECHNOLOGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
The Company manages its foreign exchange rate risk arising from intercompany
foreign currency denominated transactions through the use of foreign currency
forward contracts. The gains and losses on these transactions is not
material.
The Company believes anticipated cash flow from operations will be adequate
to meet its anticipated requirements.
Business Risks and Uncertainties
The Company operates in a changing and cyclical business environment that
involves a number of risks, some of which are beyond the Company's control.
The Company's future results will depend on its ability to manage the
cyclical nature of the semiconductor capital equipment industry, the
Company's ability to introduce new products to meet its customers' demands
for higher productivity and reliability, and the dependence of the Company on
key customers and key suppliers.
Forward-Looking Statements
This 10-Q, other SEC filings, and pronouncements and press releases made from
time to time by the Company through its senior management may include a
number of forward-looking statements, including, but not limited to,
statements with respect to the Company's future financial performance,
operating results, plans and objectives. Such statements are made pursuant
to the Safe Harbor provisions of the Private Securities Litigation Reform Act
of 1995. Actual results may differ materially from those anticipated by such
statements depending upon a variety of factors, some of which are itemized in
the "Business Risks and Uncertainties" section above. The Company undertakes
no responsibility to update any forward-looking statements which may be made
to reflect events or circumstances occurring after the dates the statements
were made or to reflect the occurrence of unanticipated events.
New Accounting Pronouncements
In February, 1997, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 128, "Earnings Per Share" (FAS128). FAS128
specifies the computation, presentation and disclosure requirements for
earnings per share and is effective for periods ending after December 15,
1997. Adoption of this accounting standard is not expected to have a
material effect on the earnings per share computation of the Company.
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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 30, 1997.
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 9,163,113 25,042
Arthur R. Buckland 9,144,103 44,052
Frank Gabron 9,156,888 31,267
Robert J. Lepofsky 9,162,156 25,999
Marvin G. Schorr 9,157,648 30,507
Wickham Skinner 9,157,346 30,809
Mark S. Wrighton 9,156,554 31,601
No abstentions or broker non-votes were recorded.
Proposal II submitted to a vote of security holders at the meeting was
ratification of the appointment of Coopers & Lybrand, L.L.P., as the
Company's independent accountants for fiscal year 1997.
For Against Abstain
9,137,716 30,722 19,717
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 27, 1997.
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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 28, 1997 By: Michael El-Hillow
Senior Vice President and
Chief Financial Officer
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