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 29, 2002.
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) 337-5500
---------------------------
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 29, 2002 was 26,093,204.
HELIX TECHNOLOGY CORPORATION
Form 10-Q
INDEX
Page
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of March 29, 2002 and
December 31, 2001 3
Consolidated Statements of Operations for the Three-Month
Periods Ended March 29, 2002 and March 30, 2001 4
Consolidated Statements of Cash Flows for the Three-Month
Periods Ended March 29, 2002 and March 30, 2001 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 13
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6 (b). Reports on Form 8-K 14
Signature 15
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------------------------
March 29, December 31,
2002 2001
(in thousands except per share data) (unaudited) (audited)
------------------------------------------------------------------------------------------
ASSETS
Current:
Cash and cash equivalents (Note 6) $ 71,968 $ 7,789
Investments 2,848 9,271
Receivables - net of allowances 14,060 11,997
Inventories (Note 2) 27,116 27,293
Income tax receivable 8,431 7,344
Deferred income taxes (Note 3) 5,707 5,707
Other current assets 1,803 2,577
------------------------------------------------------------------------------------------
Total Current Assets 131,933 71,978
------------------------------------------------------------------------------------------
Property, plant and equipment at cost 66,764 65,115
Less: accumulated depreciation (36,797) (35,614)
------------------------------------------------------------------------------------------
Net property, plant and equipment 29,967 29,501
Other assets 11,470 12,101
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TOTAL ASSETS $ 173,370 $113,580
==========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Accounts payable $ 10,350 $ 9,105
Payroll and compensation 470 986
Retirement costs 7,214 6,758
Income taxes (Note 3) 2,837 3,064
Other accrued liabilities 863 700
------------------------------------------------------------------------------------------
Total Current Liabilities 21,734 20,613
------------------------------------------------------------------------------------------
Commitments and contingencies (Note 7)
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: 26,093,204 in 2002
and 22,611,204 in 2001 26,093 22,611
Capital in excess of par value 76,169 13,878
Treasury stock, $1 par value (3,840 shares in 2002 and
2001) (232) (232)
Retained earnings 51,980 58,261
Accumulated other comprehensive loss (2,374) (1,551)
------------------------------------------------------------------------------------------
Total Stockholders' Equity 151,636 92,967
------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 173,370 $ 113,580
==========================================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
Page 3
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
---------------------------------------------------------------------------
Three Months Ended
(in thousands except per share data) March 29, 2002 March 30, 2001
---------------------------------------------------------------------------
Net sales $20,380 $48,641
---------------------------------------------------------------------------
Costs and expenses:
Cost of sales 15,541 28,507
Research and development 3,516 4,233
Selling, general and administrative 8,059 9,905
---------------------------------------------------------------------------
27,116 42,645
---------------------------------------------------------------------------
Operating (loss) income (6,736) 5,996
Joint venture income 45 965
Interest and other income 69 417
---------------------------------------------------------------------------
(Loss) income before taxes (6,622) 7,378
Income tax (benefit) provision (Note 3) (2,152) 2,398
---------------------------------------------------------------------------
Net (loss) income $(4,470) $ 4,980
===========================================================================
Net (loss) income per share (Note 4):
Basic $ (0.19) $ 0.22
Diluted $ (0.19) $ 0.22
===========================================================================
Number of shares used in per share
calculations (Note 4):
Basic 23,050 22,533
Diluted 23,050 22,649
===========================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
Page 4
HELIX TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
----------------------------------------------------------------------------------------
Three Months Ended
(in thousands) March 29, 2002 March 30, 2001
----------------------------------------------------------------------------------------
Cash flows from operating activities:
Net (loss) income $ (4,470) $ 4,980
Adjustments to reconcile net (loss) income to net
cash (used) provided by operating activities:
Depreciation and amortization 1,439 1,174
Other (156) (1,069)
Net change in operating assets and liabilities (A) (1,078) 2,865
----------------------------------------------------------------------------------------
Net cash (used) provided by operating activities (4,265) 7,950
----------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (1,905) (6,278)
Purchase of investments (6,689) (10,487)
Sale of investments 13,076 10,315
----------------------------------------------------------------------------------------
Net cash provided (used) by investing activities 4,482 (6,450)
----------------------------------------------------------------------------------------
Cash flows from financing activities:
Net proceeds from stock offering 65,246 0
Net cash provided by employee stock plans 527 0
Cash dividends paid (1,811) (2,704)
----------------------------------------------------------------------------------------
Net cash provided (used) by financing activities 63,962 (2,704)
----------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents 64,179 (1,204)
Cash and cash equivalents, at the beginning of the period 7,789 15,435
----------------------------------------------------------------------------------------
Cash and cash equivalents, at the end of the period $ 71,968 $ 14,231
========================================================================================
(A) Change in operating assets and liabilities:
(Increase)/decrease in receivables $ (2,063) $ 10,793
Decrease/(increase) in inventories 177 (608)
(Increase) in income tax receivable (1,087) 0
Decrease/(increase) in other current assets 774 (167)
Increase/(decrease) in accounts payable 1,245 (7,254)
(Decrease)/increase in other accrued expenses (124) 101
----------------------------------------------------------------------------------------
Net change in operating assets and liabilities $ (1,078) $ 2,865
========================================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
Page 5
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
------------------------------
The accompanying consolidated financial statements for the three-month
periods ended March 29, 2002, and March 30, 2001, contain all adjustments
(consisting only of normal recurring adjustments) necessary to present
fairly the financial position as of March 29, 2002, and December 31, 2001,
and the results of operations and cash flows for the three-month periods
ended March 29, 2002, and March 30, 2001.
The results of operations for the three-month period ended March 29, 2002,
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 29, 2002,
and March 30, 2001, 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 - Inventories
--------------------
------------------------------------------------------------------------
(in thousands) March 29, 2002 December 31, 2001
------------------------------------------------------------------------
Finished goods $ 9,201 $ 8,570
Work in process 12,447 13,067
Materials and parts 5,468 5,656
---------------------------
$27,116 $27,293
===========================
Inventories are stated at the lower of cost or market on a first-in, first-
out basis.
Note 3 - Income Taxes
---------------------
The net federal, state and foreign income tax benefit was $2,152,000 for
the three-month period ended March 29, 2002. For the three-month period
ended March 30, 2001, the Company had a net federal, state and foreign
income tax provision of $2,398,000. 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 both the three-month periods ended March
29, 2002, and March 30, 2001, was 32.5%.
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.
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HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - 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) March 29, 2002 March 30, 2001
-----------------------------------------------------------------------------------
Net (loss) income $ (4,470) $ 4,980
========================
Basic shares 23,050 22,533
Add: Common equivalent shares - 116
------------------------
Diluted shares 23,050 22,649
========================
Basic net (loss) income per share $ (0.19) $ 0.22
========================
Diluted net (loss) income per share $ (0.19) $ 0.22
========================
Common equivalent shares represent shares issuable upon exercise of stock options
(using the treasury stock method). The Company had 568,375 options outstanding not
included in the computation of diluted shares for the first quarter of 2002, because the
Company was in a net loss position and the inclusion of such shares would be anti-
dilutive. The Company had 173,500 options outstanding not included in the computation of
diluted shares for the first quarter of 2001, because the option price was greater than
the average market price of the common shares.
Note 5 - Other Comprehensive (Loss) Income
------------------------------------------
-----------------------------------------------------------------------------------------
Three Months Ended
(in thousands) March 29, 2002 March 30, 2001
-----------------------------------------------------------------------------------------
Net (loss) income $ (4,470) $ 4,980
-----------------------------------------------------------------------------------------
Other comprehensive (loss) before tax:
Foreign currency translation adjustment (1,078) (1,023)
Unrealized (loss) gain on available-for-sale
investment (36) 35
-----------------------------------------------------------------------------------------
Other comprehensive (loss), before tax (1,114) (988)
Income tax related to items of other
comprehensive (loss) 291 220
-----------------------------------------------------------------------------------------
Other comprehensive (loss), net of tax (823) (768)
-----------------------------------------------------------------------------------------
Comprehensive (loss) income $ (5,293) $ 4,212
=========================================================================================
Page 7
HELIX TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6 - Common Stock Offering
------------------------------
On March 19, 2002, the Company completed a public offering of 3,450,000
shares of its common stock. The Company realized proceeds of $65.2
million, net of underwriting fees and discounts and offering expenses.
Note 7 - Commitments and Contingencies
--------------------------------------
The Company had a three year revolving credit agreement with Fleet National
Bank entered into in July 2000 that permitted the Company to borrow up to
$25.0 million, subject to compliance with certain covenants. We had no
borrowings outstanding under the credit agreement as of March 29, 2002, and
December 31, 2001. The credit agreement was terminated in April 2002.
Note 8 - New Accounting Pronouncements
--------------------------------------
In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142 (SFAS 142), "Goodwill and Other Intangible Assets," which became
effective for us on January 1, 2002. SFAS 142 requires, among other things,
the discontinuance of goodwill amortization and includes provisions for the
reclassification of certain existing recognized intangibles as goodwill,
reassessment of the useful lives of existing recognized intangibles and
reclassification of certain intangibles out of previously reported goodwill.
The revised standards include transition rules and requirements for
identification, valuation and recognition of a much broader list of
intangibles as part of business combinations than prior practice, most of
which will continue to be amortized.
In October 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 (SFAS 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets." The objectives of SFAS 144 are to address significant issues
relating to the implementation of FASB Statement No. 121 (SFAS 121),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," and to develop a single accounting model, based
on the framework established in SFAS 121, for long-lived assets to be
disposed of by sale, whether previously held and used or newly acquired.
SFAS 144 is effective for financial statements issued for fiscal years
beginning after December 15, 2001 and, generally, its provisions are to be
applied prospectively.
The Company adopted these standards, and they will not have a material
impact on its consolidated financial statements.
Page 8
HELIX TECHNOLOGY CORPORATION
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations
---------------------
You should read the following discussion and analysis together with our
financial statements, related notes and other financial information
appearing elsewhere in this report. In addition to historical information,
the following discussion and other parts of this report contain
forward-looking information that involves risks and uncertainties. Our
actual results could differ materially from those anticipated by such
forward-looking information due to competitive factors and other factors
discussed under "Important Factors That May Affect Future Results" below.
Significant Accounting Policies
-------------------------------
Management's Discussion and Analysis of Financial Condition and Results of
Operations are based on our consolidated financial statements, which have
been prepared in accordance with United States generally accepted
accounting principles. The preparation of these financial statements
requires our management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses. These
estimates and assumptions are based on historical experience and on various
other factors that we believed to be reasonable under the circumstances,
the results of which form the basis for making judgments about our critical
accounting policies. Actual results may differ from these estimates and
judgments under different assumptions or conditions.
Revenue Recognition. Net sales is recognized upon shipment provided title
and risk of loss have been transferred to the customer, there is evidence
of an arrangement, fees are fixed or determinable, and collection is
reasonably assured. As part of a sale, we offer customers a warranty on
defects in materials and workmanship. We continuously monitor and track
the related product returns and record a provision for the estimated amount
of such future returns, based on historical experience and any notification
we receive of pending returns. While such returns have historically been
within our expectations and the provisions established, we cannot guarantee
that we will continue to experience the same return rates that we have in
the past. Any significant increase in material and workmanship defect
rates and the resulting credit returns could have a material adverse impact
on our operating results for the period or periods in which such returns
materialize. We also maintain allowances for doubtful accounts for
estimated losses resulting from the inability of our customers to make
required payments. If the financial condition of our customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required.
Inventory. We value inventory at the lower of cost (first-in, first-out
method) or market. We regularly review inventory quantities on hand and
record a provision to write down inventory to its estimated net realizable
value, if less than cost, based upon management's assumptions of future
material usage and obsolescence, which are a result of future demand and
market conditions. If actual market conditions become less favorable than
those projected by management, additional inventory provisions may be
required.
Investments. We own 50% of a joint venture, ULVAC Cryogenics, Inc., or
UCI, which manufactures and sells cryogenic vacuum pumps in Japan,
principally to ULVAC Corporation. We account for the joint venture using
the equity method of accounting, and we also receive royalties from the
joint venture under the terms of a license and technology agreement. The
royalties we receive from UCI, as well as our equity in the income and
losses of UCI, are both included in our financial statements under joint
venture income.
Page 9
HELIX TECHNOLOGY CORPORATION
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------
Results of Operations
---------------------
Beginning in 2001, a slowdown in the global market for semiconductor
capital equipment impacted us after experiencing a period of significant
growth in 1999 and 2000. Net sales for the first quarter ended March 29,
2002, (the "2002 Quarter") were $20.4 million compared with net sales for
the first quarter ended March 30, 2001, (the "2001 Quarter") of $48.6
million. While on a year over year basis sales declined, sales increased
sequentially from the fourth quarter, indicating initial signs of recovery
from the slowdown.
Cost of sales for the 2002 Quarter was $15.5 million compared with $28.5
million for the 2001 Quarter, a decrease of 45.5%. The gross margin for
the 2002 Quarter was 23.7% compared with 41.4% for the 2001 Quarter. The
reduction in gross margin was primarily attributable to decreased
production volume as overhead costs were spread over a smaller sales base.
Research and development expenses were $3.5 million for the 2002 Quarter,
or 17.3% of net sales, compared to $4.2 million, or 8.7% of net sales, for
the 2001 Quarter. Despite the significant near-term reduction in product
demand, we continue to focus on developing technologies to support a new
generation of products for 300 millimeter capable production tools, to
expand our GOLDLink support service capability and to improve our core
component product lines. (GOLDLink is a registered trademark of Helix
Technology Corporation.)
Total selling, general and administrative expenses were $8.1 million in the
2002 Quarter as compared with $9.9 million in the 2001 Quarter. Our
spending declined due to ongoing cost containment measures as well as due
to the restructuring program implemented and completed in the third quarter
of 2001 in response to the continued slowdown in the semiconductor capital
equipment industry. We will continue to spend in these areas commensurate
with our near-term business needs and marketplace opportunities.
Royalty and equity income from our joint venture in Japan decreased by $0.9
million in the 2002 Quarter compared to the 2001 Quarter due to the decline
in the Japanese semiconductor capital equipment market.
Interest and other income for the 2002 Quarter was $0.1 million, compared
with $0.4 million for the 2001 Quarter, reflecting lower interest rates and
lower average cash, cash equivalent and investment balances.
For the 2002 Quarter, the Company had a pretax loss of $6.6 million
resulting in a tax benefit of $2.2 million compared to a pretax income of
$7.4 million and a tax provision of $2.4 million for the 2001 Quarter. The
effective tax rate for the 2002 and 2001 Quarters was 32.5%. The tax rates
differ from the U.S. statutory rate primarily due to tax credits and
undistributed nontaxable equity income from our joint venture.
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
-------------------------------
Cash used by operating activities for the 2002 Quarter was $4.3 million
compared with $8.0 million in cash provided by operating activities for the
2001 Quarter, primarily due to our net loss in the 2002 Quarter.
In the 2002 Quarter, we spent $1.9 million principally for the continued
efforts associated with the implementation of our global information
system. In the 2001 Quarter, capital expenditures were $6.3 million
primarily for our new Japanese service center and the implementation of our
global information system. We expect our capital expenditures in 2002 will
be significantly lower than 2001.
On March 19, 2002, we completed a public offering of 3,450,000 shares of
our common stock. We realized proceeds of $65.2 million, net of
underwriting fees and discounts and offering expenses.
Cash dividends paid to stockholders were $1.8 million or $0.08 per common
share during the 2002 Quarter and $2.7 million or $0.12 per common share
during the 2001 Quarter. In October 2001, after considering the current
uncertain business environment in the semiconductor equipment industry, our
board of directors reduced the quarterly dividend to $0.08 per share,
resulting in aggregate quarterly cash savings of approximately $1.0
million.
We manage our 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 are not
material.
We had a three year revolving credit agreement with Fleet National Bank
entered into in July 2000 that permitted us to borrow up to $25.0 million,
subject to compliance with certain covenants. We had no borrowings
outstanding under the credit agreement as of March 29, 2002, and December
31, 2001. The credit agreement was terminated in April 2002.
We believe that our existing funds and anticipated cash flow from operations
will satisfy our working capital and capital expenditure requirements for at
least the next 12 months.
Important Factors That May Affect Future Results
------------------------------------------------
This Form 10-Q contains forward-looking statements. These forward-looking
statements appear principally in the section entitled "Management's
Discussion and Analysis of Financial Conditions and Results of Operations."
Forward-looking statements may appear in other sections of this report as
well. Generally, the forward-looking statements in this report use words
like "expect," "anticipate," "plan," "believe," "seek," "estimate," and
similar expressions.
Page 11
HELIX TECHNOLOGY CORPORATION
PART I
Item 2. Management's Discussion and Analysis of Financial Condition and
------------------------------------------------------------------------
Results of Operations (continued)
---------------------------------
Important Factors That May Affect Future Results (continued)
------------------------------------------------------------
Forward-looking statements are not guarantees of future performance and
involve certain risks, uncertainties, and assumptions that could cause our
future results to differ materially from those expressed in any
forward-looking statements made by or on behalf of us. Many such factors
are beyond our ability to control or predict. Readers are accordingly
cautioned not to place undue reliance on forward-looking statements. We
disclaim any intent or obligation to update publicly any forward-looking
statements, whether in response to new information, future events, or
otherwise.
Our 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 our results of operations. We cannot assure
you that developments in the semiconductor industry or the semiconductor
equipment industry will occur at the rate or in the manner that we expect.
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, we may experience material
fluctuations in our future operating results on a quarterly or annual basis,
which could materially affect our 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
Foreign Currency Exchange Rate Risk
-----------------------------------
A portion of our business is conducted outside the United States through our
foreign subsidiaries. Our foreign subsidiaries maintain their accounting
records in their local currencies. Consequently, fluctuations in exchange
rates affect the period-to-period comparability of results. To reduce the
risks associated with foreign currency rate fluctuations, we have entered
into forward exchange contracts on a continuing basis to offset the currency
exposures. The gains and losses on these transactions partially offset the
unrealized and realized foreign exchange gains and losses of the underlying
exposures. The net gains and losses were immaterial for the years presented
and were included in cost of sales. We plan to continue to use forward
exchange contracts to mitigate the impact of exchange rate fluctuations.
The notional amount of our outstanding foreign currency contracts at March
29, 2002, was $9.4 million. The potential fair value loss for a
hypothetical 10% adverse change in forward currency exchange rates at March
29, 2002, would be $0.9 million. The potential loss was estimated
calculating the fair value of the forward exchange contracts at March 29,
2002, and comparing that with the value calculated using the hypothetical
forward currency exchange rates.
Credit Risk
-----------
We are exposed to concentration of credit risk in cash and cash equivalents,
investments, trade receivables, and short-term foreign exchange forward
contracts. We place our cash and cash equivalents with our primary bank, a
major financial institution, with a high-quality credit rating. Our
investments consist of money market funds, municipal government agencies and
tax-free bonds or investment-grade securities. We enter into short-term
foreign currency exchange contracts with our primary bank.
Page 13
HELIX TECHNOLOGY CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
--------------------------
We are a defendant in an action brought in 1998 in the Massachusetts
Superior Court by Raytheon Company which alleges that between 1992 and 1994
we sold Raytheon defective components used in missile guidance systems
manufactured by Raytheon. We have not been in the business of selling these
components since 1994. We have denied all claims that Raytheon has asserted
and succeeded in having certain claims dismissed, although these dismissals
are potentially appealable at the conclusion of the trial stage of the case.
The action is in the discovery and motion phase and no trial date has been
set. We believe that we have meritorious defenses and that, although the
ultimate outcome of the matters cannot be predicted with certainty, the
disposition of the matters should not have a material effect on our
financial position.
We are also involved in various legal proceedings in the normal course of
business. In our opinion, these proceedings involve amounts that would not
have a material effect on our financial position or results of operations if
such proceedings were resolved unfavorably.
Item 6(b). Reports on Form 8-K
-------------------------------
The Company did not file any Current Reports on Form 8-K during the quarter
ended March 29, 2002.
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)
April 30, 2002 By: /s/Jay Zager
--------------- -----------------------------------
Date Jay Zager
Senior Vice President
Chief Financial Officer
Page 15