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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 quarterly period ended October 1, 2004,

or

[  ]

  

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transitional 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)

(I.R.S. Employer Identification No.)
   

Mansfield Corporate Center

  

Nine Hampshire Street

  

Mansfield, Massachusetts

02048-9171

(Address of principal executive offices)

(Zip Code)
   

(508) 337-5500

(Registrant's telephone number, including area code)


Indicate 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 period 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 [  ]


Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes [X]        No [  ]


The number of shares outstanding of the registrant's Common Stock, $1 par value, as of October 1, 2004, was 26,112,979.

HELIX TECHNOLOGY CORPORATION

Form 10-Q

INDEX
     

Page

PART I.

FINANCIAL INFORMATION

  
       
       
 

Item 1.

Consolidated Financial Statements

  
       
   

Consolidated Balance Sheets as of October 1, 2004, and

  
   

December 31, 2003

3
       
   

Consolidated Statements of Operations for the Three and Nine-Month

  
   

Periods Ended October 1, 2004, and September 26, 2003

4
       
   

Consolidated Statements of Cash Flows for the Nine-Month

  
   

Periods Ended October 1, 2004, and September 26, 2003

5
       
   

Notes to Consolidated Financial Statements

6
       
 

Item 2.

Management's Discussion and Analysis of

  
   

Financial Condition and Results of Operations

12
       
 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

18
       
 

Item 4.

Controls and Procedures

18
       
       

PART II.

OTHER INFORMATION

  
       
 

Item 1.

Legal Proceedings

19
       
 

Item 6.

Exhibits

19
       

Signatures

    

20
       

Exhibit Index

  

21

PART I.  FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

HELIX TECHNOLOGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited)

October 1,

December 31,

(in thousands except share data)

2004

2003

                 

ASSETS

Current:

  Cash and cash equivalents

$

14,063

$

24,448

  Investments

62,406

42,939

  Receivables - net of allowances

24,796

21,033

  Inventories

20,728

22,032

  Other current assets

3,215

1,934

Total Current Assets

    

125,208

      

112,386

  

Property, plant and equipment at cost

    

65,994

      

64,908

  

  Less:  accumulated depreciation

    

(47,087

)

    

(44,085

)

Net property, plant and equipment

    

18,907

      

20,823

  

Other assets

    

13,870

      

12,781

  

TOTAL ASSETS

  

$

157,985

    

$

145,990

  

                 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current:

  Accounts payable

$

8,676

$

8,918

  Payroll and compensation

968

1,628

  Accrued restructuring costs

185

689

  Income taxes

4,642

4,383

  Other accrued liabilities

2,721

3,214

Total Current Liabilities

    

17,192

      

18,832

  

  Retirement costs

8,653

8,352

Total Liabilities

    

25,845

      

27,184

  

                 

Commitments and contingencies

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 26,119,829 in 2004 and 26,103,204 in 2003;

  outstanding 26,112,979 in 2004 and 26,099,364 in 2003

 

26,120

26,103

Capital in excess of par value

76,642

76,405

Treasury stock, $1 par value (6,850 shares in 2004 and

  3,840 shares in 2003)

(308

)

(232

)

Retained earnings

29,110

16,500

Accumulated other comprehensive income

576

30

Total Stockholders' Equity

132,140

118,806

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

157,985

$

145,990

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

Nine Months Ended

October 1,

September 26,

October 1,

September 26,

(in thousands except per share data)

2004

2003

2004

2003

Net sales

$

40,353

$

25,973

$

124,753

$

74,151

Costs and expenses:

  Cost of sales

24,130

17,133

74,672

49,966

  Research and development

2,730

2,333

7,842

7,563

  Selling, general and administrative

8,883

7,577

26,084

22,942

35,743

27,043

108,598

80,471

Operating income (loss)

4,610

(1,070

)

16,155

(6,320

)

Joint venture income

774

161

2,229

760

Interest and other income

256

229

692

696

Income (loss) before taxes

5,640

(680

)

19,076

(4,864

)

Income tax (benefit) provision

(129

)

8,424

2,289

7,065

Net income (loss)

$

5,769

$

(9,104

)

16,787

$

(11,929

)

Net income (loss) per share:

  Basic

$

0.22

$

(0.35

)

$

0.64

$

(0.46

)

  Diluted

$

0.22

$

(0.35

)

$

0.64

$

(0.46

)

Number of shares used in per share

  calculations:

  Basic

26,112

26,099

26,109

26,099

  Diluted

26,165

26,099

26,194

26,099


The accompanying notes are an integral part of these consolidated financial statements.

Page 4

HELIX TECHNOLOGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

Nine Months Ended

October 1,

September 26,

(in thousands)

2004

2003

Cash flows from operating activities:

  Net income (loss)

$

16,787

$

(11,929

)

  Adjustments to reconcile net income (loss) to net cash provided

    by operating activities:

  Depreciation and amortization

3,971

4,542

  Deferred income taxes

--

8,708

  Other

(502

)

754

  Change in operating assets and liabilities:

    Receivables - net of allowances

(3,763

)

(3,409

)

    Inventories

1,304

2,155

    Income tax receivables

(892

)

10,246

    Other current assets

(389

)

271

    Accounts payable

(242

)

(1,320

)

    Accrued restructuring costs

(504

)

(3,051

)

    Other accrued expenses

(593

)

1,189

Net cash provided by operating activities

15,177

8,156

Cash flows from investing activities:

  Capital expenditures

(2,076

)

(2,074

)

  Purchase of investments

(30,042

)

(65,972

)

  Sale of investments

10,555

48,275

Net cash used in investing activities

(21,563

)

(19,771

)

Cash flows from financing activities:

  Net cash provided by employee stock plans

178

--

  Cash dividends paid

(4,177

)

(3,132

)

Net cash used in financing activities

(3,999

)

(3,132

)

Decrease in cash and cash equivalents

(10,385

)

(14,747

)

Cash and cash equivalents, at the beginning of the period

24,448

26,752

Cash and cash equivalents, at the end of the period

$

14,063

$

12,005

The accompanying notes are an integral part of these consolidated financial statements.

Page 5

HELIX TECHNOLOGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 - Basis of Presentation and Stock Compensation

In the opinion of management, the accompanying unaudited consolidated balance sheets, statements of operations and cash flows contain all adjustments necessary to present fairly the financial position of Helix Technology Corporation and its wholly owned subsidiaries (the "Company") at October 1, 2004, and December 31, 2003, and the results of the Company's operations and cash flows for the three- and nine-month periods ended October 1, 2004, and September 26, 2003.

The consolidated financial statements included herein have been prepared by the Company, without audit of the three- and nine-month periods ended October 1, 2004, and September 26, 2003, 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 accounting principles generally accepted in the United States of America 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.

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates these estimates and judgments, including those related to revenue recognition, adequacy of reserves, valuation of investments and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from our estimates.

Certain reclassifications have been made to the prior year's consolidated financial statements to conform with the current period presentation.

Stock Compensation

Options for the purchase of the Company's stock have been granted to officers, directors and key employees under various nonqualified stock option agreements. The Company accounts for these grants under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. If the recognition provisions of FASB Statement No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an Amendment of FASB Statement No. 123," had been adopted, the effect on net income and basic and diluted net income per share would have been as follows:

Page 6

HELIX TECHNOLOGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Three Months Ended

Nine Months Ended

October 1,

September 26,

October 1,

September 26,

(in thousands except per share data)

2004

2003

2004

2003

Net income (loss), as reported

$

5,769

$

(9,104

)

$

16,787

$

(11,929

)

Deduct:  Total stock-based employee

  compensation expense determined under fair

  value based method for all awards, net of