10-Q/A 1 a2026052z10-qa.txt 10-Q/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------- FORM 10-Q/A /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 29, 2000 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 1-4737 ---------------------- HIGH VOLTAGE ENGINEERING CORPORATION (Exact name of registrant as specified in its charter) MASSACHUSETTS (State or other jurisdiction of incorporation) 04-2035796 (I.R.S. Employer Identification No.) 401 Edgewater Place, Suite 680, Wakefield, MA 01880 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (781) 224-1001 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. (1) Yes /X/ No / / (2) Yes / / No /X/ Number of Common Shares outstanding at September 15, 2000: 1,082.7429 shares. CONTENTS

2 PART I FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)

See accompanying notes to consolidated financial statements. 3 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

See accompanying notes to consolidated financial statements. 4 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (DOLLARS IN THOUSANDS)

See accompanying notes to consolidated financial statements. 5 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)

6 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)

See accompanying notes to consolidated financial statements. 7 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The consolidated financial statements of High Voltage Engineering Corporation and Subsidiaries (the "Company") include accounts of High Voltage Engineering Corporation and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and, in the opinion of management, include all adjustments, which are of a normal and recurring nature, necessary to fairly present the financial position for the interim periods presented. The Company operates on a 52 or 53 week fiscal year. The three months ended July 29, 2000 and July 31, 1999 include the results of operations of the Company for 13 week and 14 week periods, respectively. The terms "fiscal 2001" and "fiscal 2000" refer to the Company's fiscal years ended April 28, 2001 and April 29, 2000, respectively. The consolidated financial statements do not contain all disclosures included in financial statements normally prepared in accordance with generally accepted accounting principles pursuant to SEC rules and regulations. These consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company as of and for the fiscal year ended April 29, 2000, as filed with the SEC on August 18, 2000, and are not necessarily indicative of the results that may be expected for the year ending April 28, 2001. NOTE 2 -- INVENTORIES Inventories consisted of the following as of:

NOTE 3 - ACQUISITIONS AND OTHER TRANSACTIONS On December 22, 1999, the Company acquired all the outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A., an Italian corporation, and subsidiaries ("ASI"), from Ansaldo Invest, S.p.A., an Italian corporation, which was the corporate parent of ASI and a wholly owned subsidiary of Finmeccanica S.p.A. pursuant to a Stock Purchase Agreement ("Purchase Agreement") for an aggregate purchase price of $29,061 in cash and Italian bank financing. The acquisition was completed on January 18, 2000. The purchase price is subject to an adjustment based on the difference between the actual working capital, as defined, at the closing date and a minimum contractual amount per the Purchase Agreement. The Company has filed for arbitration in Italy to settle this final purchase price adjustment and both parties are continuing negotiations. 8 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 3 - ACQUISITIONS AND OTHER TRANSACTIONS (CONTINUED) The acquisition has been accounted for using the purchase method of accounting, and accordingly, the purchase price has been allocated to the assets purchased and the liabilities assumed based upon management's preliminary estimate of the fair value at the date of acquisition. Adjustments to the asset values, including inventories, fixed assets and liabilities in the final allocation may differ from these estimates, which could impact future earnings. The Company has estimated that there is an excess of book value over cost which has been allocated to certain long term assets. On July 2, 1999, Physical Electronics, Inc. ("PHI"), a wholly owned subsidiary of the Company, acquired all the outstanding capital stock of Charles Evans & Associates ("CE&A") pursuant to a Stock Purchase Agreement ("Agreement") among PHI and the shareholders of CE&A. Under the Agreement, the former shareholders of CE&A received in exchange for their stock an aggregate consideration of $38,624 in cash reduced by the amount of all debt of CE&A outstanding at the closing. The acquisition has been accounted for using the purchase method of accounting, and accordingly, the purchase price has been allocated to the assets purchased and the liabilities assumed based the fair values at the date of the acquisition. The Company has charged historical earnings $1,650 for purchased research and development which had been revalued. The excess of the purchase price over the fair value of the net assets acquired has been recorded as cost in excess of assets acquired, which will be amortized on a straight-line basis over 20 years. On June 2, 2000, PHI acquired all of the outstanding shares of Vivirad U.S.A Corporation ("Holdings"), the holding company of Vivirad-High Voltage Corporation ("Vivirad") pursuant to a Stock Purchase Agreement ("Agreement") among PHI, the Company, Vivirad, and Holdings, and Vivirad S.A. ("Seller"), a French corporation and the sole stockholder of Holdings. Under the Agreement, the Seller would receive in exchange for the stock of Holdings an aggregate purchase price of $2,281 comprised of $1,000 in cash and $1,281 in certain deferred payments. The deferred payments were represented by Promissory Notes of PHI in the aggregate amount of $1,300, with such notes due at various times. The Agreement also provides for the Seller to receive a contingent payment equal to $550 provided Vivirad achieves certain milestones, as defined. The net purchase prices have been allocated as follows:

9 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 3 - ACQUISITIONS AND OTHER TRANSACTIONS (CONTINUED) The operating results of CE&A and Vivirad have been included in the Company's Consolidated Statement of Operations from the dates of acquisition. Pursuant to the Purchase Agreement, the operating results of ASI have been included in the Company's Consolidated Statement of Operations from January 1, 2000. The following pro forma financial information illustrates the effects of the acquisitions of CE&A and ASI after giving effect to the impact of certain adjustments, such as amortization, depreciation and certain purchase accounting adjustments. The unaudited pro forma financial information for Vivirad for the first quarter of fiscal 2000 has not been presented because the effect of the transaction would not have been material to the results of operations of the Company. On the basis of a pro forma consolidation of the results of operations as if the acquisitions had taken place at the beginning of the periods presented, consolidated net sales would have been $106,914 for the first quarter of fiscal 2000. Consolidated pro forma loss from continuing operations would have been $12,958 for the first quarter of fiscal 2000. Consolidated pro forma net loss applicable to common stockholders would have been $14,387 for the first quarter of fiscal 2000. Consolidated pro forma net loss from continuing operations per common share applicable to common shareholders would have been $13,283.93 for the first quarter of fiscal 2000. The pro forma results are not necessarily indicative of the actual results as if the transactions had been in effect for the entire periods presented. In addition, they are not intended to be a projection of future results. SALE OF ACCOUNTS RECEIVABLE On December 29, 1999, the Company entered into a Trade Receivables Purchase Facility (the "Receivables Purchase Facility") with High Voltage Funding Corporation, ("HV-FC"), a limited purpose subsidiary of the Company. Under this agreement, other domestic subsidiaries of the Company sell a defined pool of domestic trade accounts receivable ("Pool Assets"), and the related rights inherited of the Company and its domestic subsidiaries to HV-FC. The Receivables Purchase Facility allows the domestic subsidiaries to sell to the Company which, in turn, sells to HV-FC an undivided ownership interest in the Pool Assets, up to a limit of $22.5 million. HV-FC owns all of its assets and sells participating interests in such accounts receivable to a third party which, in turn, purchases and receive ownership and security interests in those assets. As collections reduce accounts receivable included in the pool, the operating subsidiaries sell new receivables to HV-FC. The limited purpose subsidiary has the risk of credit loss on the receivables. At July 29, 2000, $15,836 was utilized under the Receivables Purchase Facility. The proceeds from the sale were used to reduce borrowings and to fund operations and acquisitions. The proceeds are less than face value of accounts receivable sold, by an amount that approximates the cost that HV-FC would incur if it were to issue commercial backed paper by these accounts receivable. The discount from the face value, which amounted to $382 at July 29, 2000, is accounted for as a loss on the sale of receivables and has been included in other income and expenses in the Company's Consolidated Statement of Operations. The Company's operating subsidiaries retain the collections and administrative responsibilities for the participating interests in the Pool Assets. As of April 29, 2000, the Receivables Purchase Facility was amended (the "First Amendment to Receivables Purchase Agreement") to conform certain restrictive covenants to the Third Amendment to the Revolving Credit Facility. In addition, the amendment to the Company's Revolving Credit Facility requires the Company to terminate the Receivables Purchase Facility on the earliest of February 1, 2001 or the sale of a Restricted Subsidiary. The Company is currently actively seeking to refinance this facility. 10 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 4 - CONTINGENCIES The nature of the Company's business is such that it is regularly involved in legal proceedings incidental to its business and the Company believes that none of these proceedings are material. In March 1998, the Company's Robicon Corporation subsidiary initiated litigation against Toshiba International Corporation ("Toshiba") in the United States District Court for the Western District of Pennsylvania alleging infringement of one of Robicon's Perfect Harmony patents. In June 1998, Toshiba filed suit against Robicon and several other defendants in the United States District Court for the Southern District of Texas alleging, among other things, false and disparaging comments concerning Toshiba, interference with contract, violation of the Texas Competition and Trade Practices Statute and civil conspiracy to restrict Toshiba's business and cause the wrongful termination of a purchase order of one of its customers. Damages under each section are claimed to be in excess of $75, the federal statutory minimum, in addition to a claim for punitive damages. In its suit, Toshiba has also claimed that Robicon is infringing a patent held by Toshiba and requested a declaratory judgment that Robicon's patent, which is the subject of the Pennsylvania action, is invalid. In March 1999, the Texas District Court dismissed without prejudice all claims except the alleged patent infringement by Robicon and the request for declaratory judgement. These claims were then transferred to the Western District of Pennsylvania. Also in March 1999, Toshiba filed a petition in Harris County, Texas in which it realleged the claims dismissed by the Texas district court, citing the additional costs by Toshiba to reinstate its purchase order and damages to its reputation not exceeding $5,000. On November 29, 1999, the Pennsylvania district court granted Robicon's Motion to dismiss Toshiba's patent infringement claim against Robicon. The only remaining transferred claim is Toshiba's request for declaratory judgment. In November 1999, Toshiba filed a motion to dismiss without prejudice all of the claims pending in Harris County, Texas pursuant to a Tolling Agreement which permits Toshiba one (1) year to re-file its claims. In December 1999, the Texas state court granted Toshiba's motion. Certain other claims, suits and complaints have been filed or are pending against the Company. In the opinion of the Company, all such matters are without merit or are of such kind, or involve such amounts, as would not have a material effect on the consolidated financial position or the results of operations of the Company if resolved unfavorably to the Company. If estimates change, there is no assurances these items will not require additional accruals by the Company. NOTE 5 - RESTRUCTURING CHARGE In fiscal 2000, the Company recorded various restructuring charges in the High Power Conversion Products segment for headcount reductions and a facility closing in connection with the acquisition of ASI along with severance relating to the reduction of some engineering and administrative headcount at Robicon. The Company also recorded restructuring charges in the Advanced Surface Analysis Instruments segment at PHI for severance. 11 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 5 - RESTRUCTURING CHARGE (CONTINUED) HIGH POWER CONVERSION PRODUCTS Restructuring charge for headcount reductions consisted of the following:

Restructuring charge for facility closing consisted of the following:

ADVANCED SURFACE ANALYSIS INSTRUMENTS Restructuring charge for headcount reductions consisted of the following:

12 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 6 - SEGMENT DATA The Company operates in five industry segments. The Company's reportable segments are individual business units that offer different products and services. Each business unit has its own management team and manufacturing facilities and maintains its own independent market identity. The Company evaluates performance based on operating earnings of the respective business units. Information concerning operations in these businesses is as follows:

13 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 6 - SEGMENT DATA (CONTINUED) The following represents the supplemental consolidating balance sheet for the Company's restricted and unrestricted subsidiaries at July 29, 2000.

14 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 6 - SEGMENT DATA (CONTINUED) The following represents the supplemental consolidating statement of operation for the Company's restricted and unrestricted subsidiaries for the three months ended July 29, 2000.

NOTE 7 - COMPREHENSIVE INCOME In February 1998, the FASB issued SFAS No. 130, "Reporting Comprehensive Income," which establishes standards for the reporting and display of comprehensive income. For the three months ended July 29, 2000 and July 31, 1999, respectively, the components of other comprehensive income were immaterial. The components of other comprehensive income consist solely of foreign currency translation adjustments. 15 HIGH VOLTAGE ENGINEERING CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NOTE 8 - NEW ACCOUNTING PRONOUNCEMENTS During 1998, the Financial Accounting Standards Board ("FASB") issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", which establishes accounting and reporting standards for derivative instruments and for hedging activities. In June 1999, the FASB issued SFAS 137, "Deferral of the Effective Date of FASB Statement No. 133", to defer for one year the effective date of implementation of SFAS 133. SFAS 133, as amended by SFAS 137, is effective for fiscal years beginning after June 15, 2000, with earlier application encouraged. The Company does not believe adoption will have a material impact on its financial statement disclosures. In December 1999, the SEC issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. In March 2000, the SEC issued SAB 101A, to defer for one quarter the effective date of implementation of SAB No. 101 with earlier application encouraged. In June 2000, the SEC issued SAB 101B which defers the effective date of implementation of SAB 101 to the fourth fiscal quarter of fiscal 2001. The Company is currently evaluating the impact that SAB 101 will have on its financial reporting requirements. In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44, or FIN No. 44, "Accounting for Certain Transactions Involving Stock Compensation." This Interpretation clarifies the application of APB Opinion No. 25, "Accounting for Stock Issued to Employees" and is generally effective July 1, 2000, with certain conclusions in this Interpretation covering specific events that occur after either December 15, 1998, or January 12, 2000. To the extent that this Interpretation covers events occurring during the period after December 15, 1998, or January 12, 2000, but before the effective date of July 1, 2000, the effects of applying this Interpretation are recognized on a prospective basis from July 1, 2000. Management believes the adoption of FIN No. 44 will not have a material impact on our financial position, results of operations or cash flows. NOTE 9 - EURO CONVERSION On January 1, 1999, member countries of the European Monetary Union (EMU) began a three-year transition from their national currencies to a new common currency, the euro. In the first phase, the permanent rates of exchange between the members' national currency and the euro were established and monetary, capital, foreign exchange, and interbank markets were converted to the euro. National currencies will continue to exist as legal tender and may continue to be used in commercial transactions. By January 2002, euro currency will be issued and by July 2002, the respective national currencies will be withdrawn. The Company has significant operations in member countries of the EMU. The Company is implementing a plan to address the euro's impact on information systems, currency exchange rate risk and commercial contracts. Costs of the euro conversion to date have not been material. Management believes that future conversion costs will not have a material impact on the operations, cash flows or financial condition of the Company. However, there are uncertainties as to the future costs associated with the euro conversion which may affect the Company's expectations. Factors that could influence the amount and timing of future costs include the success of the Company in identifying systems and programs, the nature and amount of programming required to upgrade or replace each of the affected programs or systems, the availability, rate and magnitude of related labor and consulting costs and the ability of the Company to successfully renegotiate or amend its commercial contracts. 16 ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except as otherwise indicated, the following discussion relates to the Company on a historical basis without giving effect to acquisitions. This report may make forward-looking statements regarding future events or the future financial performance of the Company. We caution you that these statements are only predictions and that actual events or results may differ materially. We refer you to documents the Company files from time to time with the Securities and Exchange Commission, and specifically the most recent Annual Report on Form 10-K and the "Risk Factors" section in the Company's most recent Registration Statement on Form S-4 on file. This document identifies and describes important factors that can cause the after-results to differ materially from those contained in any forward-looking statements we may make. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto contained elsewhere herein. The consolidated financial statements of the Company include the accounts of High Voltage Engineering Corporation and its subsidiaries after elimination of material inter-company transactions and balances. As used in this filing, the terms "fiscal 2001" and "fiscal 2000" refer to the Company's fiscal years ended April 28, 2001 and April 29, 2000, respectively. The Company operates on a 52 or 53 week fiscal year. The three months ended July 29, 2000 and July 31, 1999 include the results of operations of the Company for 13 week and 14 week periods, respectively. The Company conducts its business through six independent operating units, in five industry segments. Those segments are High Power Conversion Products which include Robicon Corporation and subsidiaries ("Robicon"), and Ansaldo Sistemi Industriali, S.p.A. and subsidiaries ("ASI"); Advanced Surface Analysis Instruments which include Physical Electronics, Inc. and subsidiaries ("PHI"); High Performance Modular Power Connectors which include Anderson Interconnect, Inc. and subsidiaries ("Anderson"); Customized Monitoring Instrumentation, which include Maxima Technologies, Inc. and subsidiaries ("Maxima"); Corporate and other which includes High Voltage Engineering Europa, B.V. ("HVE Europa"), each of which has its own management team and manufacturing facilities and maintains its own independent market identity. SEASONALITY; VARIABILITY OF OPERATING RESULTS The majority of the Company's operating units have historically recorded the strongest operating results in the fourth quarter of the fiscal year due in part to seasonal considerations and other factors. The timing of orders placed by the Company's customers has varied with, among other factors, the introduction of new products, product life cycles, customer attempts to manage inventory levels, competitive conditions, general economic conditions and foreign factory shutdowns during holiday periods along with the availability of funding for scientific and educational research. The variability of the level and timing of orders has, from time to time, resulted in significant periodic and quarterly fluctuations in the operations of the Company's operating units. Such variability is particularly evident at HVE Europa, which ships on average four particle accelerator systems per year. These systems are typically sold for between $1.0 million and $2.0 million each and have long lead times. As a result, the timing of HVE Europa's shipments within any fiscal year can have a material impact on an individual quarter's results. ACQUISITION OF VIVIRAD-HIGH VOLTAGE CORPORATION On June 2, 2000, PHI acquired all of the outstanding shares of Vivirad U.S.A Corporation ("Holdings"), the holding company of Vivirad-High Voltage Corporation ("Vivirad") pursuant to a Stock Purchase Agreement ("Agreement") among PHI, the Company, Vivirad, and Holdings, and Vivirad S.A. ("Seller"), a French corporation and the sole stockholder of Holdings. Under the Agreement, the Seller would receive in exchange for the stock of Holdings an aggregate purchase price of $2.3 million comprised of $1.0 million in cash and $1.3 million in certain deferred payments. The deferred payments were represented by Promissory Notes of PHI in the aggregate amount of $1.3 million with such notes due at various times. The Agreement also provides for the Seller to receive a contingent payment equal to $0.6 17 million provided Vivirad achieves certain milestones, as defined. The unaudited pro forma financial information for fiscal 2001 and fiscal 2000, respectively, has not been presented because the effect of the transaction would not have been material to the results of operations. ACQUISITION OF ANSALDO SISTEMI INDUSTRIALI S.p.A. On December 22, 1999, the Company acquired all the outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A., an Italian corporation, and subsidiaries ("ASI"), from Ansaldo Invest, S.p.A., an Italian corporation, which is the corporate parent of ASI and a wholly owned subsidiary of Finmeccanica S.p.A. pursuant to a Stock Purchase Agreement ("Purchase Agreement") for an aggregate purchase price of $29.1 million in cash, and the refinancing of ASI's outstanding debt. The acquisition was completed on January 18, 2000. The purchase price is subject to an adjustment based on the difference between the actual working capital, as defined, at the closing date and a minimum contractual amount per the Purchase Agreement. The Company has filed for arbitration in Italy to settle this final purchase price adjustment and both parties are continuing negotiations. ACQUISITION OF CHARLES EVANS & ASSOCIATES On July 2, 1999, PHI acquired all the outstanding capital stock of CE&A for an aggregate consideration of $38.6 million in cash reduced by the amount of all debt of CE&A outstanding at the closing. CONSOLIDATED Net sales for the first quarter of fiscal 2001 were $110.8 million, which was a $55.9 million or 102.1% increase from the same period in fiscal 2000. The following discussion does not address the financial results of the first quarter of fiscal 2001 for Vivirad, which was acquired on June 2, 2000, because the results of operations for Vivirad were deemed immaterial. Excluding net sales of ASI, which was acquired on December 22, 1999, and CE&A, which was acquired on July 2, 2000, net sales increased $3.5 million, or 6.6%, during the first quarter of fiscal 2001. Net loss for the first quarter of fiscal 2001 decreased to $5.3 million from a loss of $5.8 million during the same period in fiscal 2000. The primary difference in the results of operation of the first quarter of fiscal 2001 as compared to the first quarter of fiscal 2000 were the addition of the operations of ASI and CE&A which were included for the full first quarter of fiscal 2001, lower selling, general and administrative expenses, the absence of certain acquisition and restructuring related expenses, offset by lower margins and increases in research and development expenses as well as borrowing costs associated with acquisitions. SEGMENT ANALYSIS: THREE MONTHS ENDED JULY 29, 2000 COMPARED TO THREE MONTHS ENDED JULY 31, 1999 THE HIGH POWER CONVERSION PRODUCTS SEGMENT reported net sales of $66.5 million for first quarter of fiscal 2001 which was an increase of $49.3 million, or 286.3% from fiscal 2000. Excluding net sales from ASI, which was acquired on December 22, 1999, net sales for Robicon increased $1.0 million during the first quarter of fiscal 2001 as compared to the same period in fiscal 2000 primarily due to an increase in revenue from the power control systems product line. The backlog increased $5.8 million or 13.1% to $50.1 million as compared to backlog of $44.3 million at April 29, 2000. Gross margin percentage on net sales at Robicon for the first quarter of fiscal 2001 was 2.7% less than the same period in fiscal 2000. The decrease in margin was primarily as a result of a $0.6 million cost overrun on a power control system contract in a new application for Robicon. During the first quarter of fiscal 2000, the Company took actions to reduce costs at Robicon to compensate for the slow down in some of its served markets. These actions resulted in the Company recording a $0.9 million restructuring charge during the first quarter of fiscal 2000 for severance relating to the reduction of headcount at Robicon. The segment's operating loss decreased $1.7 million to a loss of $0.4 million in the first quarter of fiscal 2001 as compared to an operating loss of $2.1 18 million in the first quarter of fiscal 2000. Excluding an operating income of $1.3 million at ASI, operating loss decreased $0.4 million during the first quarter of fiscal 2001 to a loss of $1.7 million as compared to a loss of $2.1 million in the first quarter of fiscal 2000 primarily due to the absence of a restructuring charge in the first quarter of fiscal 2001 offset by a lower gross margin rate. ASI reported net sales of $48.3 million for the first quarter of fiscal 2001, The sales levels reflected strong performances from the Motors and Power Controls product lines, and strong invoicing from the Metals division. For Motors and Power Controls, sales reflected high order levels for low voltage drives, direct current motors and medium voltage induction motors, with major customers. The Metals division also reported strong revenue levels due to invoicing of contracts on significant steel projects in the US and in Italy. ASI generated net income of $0.2 million for the first quarter of fiscal 2001. The results reflect the benefits from the completion of the sale of the UK systems business, implementation of the headcount reduction plan in Italy and the impact of better product mix and higher volumes in the manufacturing units. This is reflected in an improvement in gross margin from 12.6% to 15.6% during the period. Results for the three-month period were in line with management expectations set at the start of the period. The business will be significantly seasonally impacted in the second quarter due to the Italian factory shutdowns of two to three weeks during the month of August that will impact revenue for the quarter. It is the Company's belief that the acquisition of ASI will improve the operating results of both Robicon and ASI. The combination of these businesses should substantially improve the competitive position of the High Power Conversion Products Segment by expanding the product offerings, expanding domain expertise, eliminating niche competition between the businesses, and providing critical mass with regards to sourcing volume. In addition, the Company has implemented a plan to improve operating profitability specifically at ASI by reducing headcount, limiting the use of outside contractors, the simultaneous closing and integration of the ASI U.S. operations into Robicon, the selling of the ASI U.K. systems business and the upgrade of the ASI leadership team. Certain cost savings related to shared services and facility rent were also negotiated in connection with the acquisition of ASI. THE ADVANCED SURFACE ANALYSIS INSTRUMENTS AND SERVICES SEGMENT reported net sales of $17.3 million for the first quarter of fiscal 2001 which was an increase of $6.1 million, or 55.1% from the first quarter of fiscal 2000. The increase in net sales was due in part to the inclusion of a full quarter of net sales for CE&A in the first quarter of fiscal 2001 versus one month of net sales during the first quarter of fiscal 2000. Excluding the sales of CE&A the net sales of PHI increased $2.0 million or 21.0% during the first quarter of fiscal 2001 as compared to the first quarter of fiscal 2000 due to higher sales in all major product lines. Operating loss decreased $1.7 million to a loss of $0.4 million in the first quarter of fiscal 2001 as compared to a loss of $2.1 million in the first quarter of fiscal 2000. The operating loss is attributable to a charge of $1.7 million in the first quarter of fiscal 2000 to write off purchased in-process research and development expense, which had been valued in accordance with purchase accounting procedures. The decline in gross margin percentage during the first quarter of fiscal 2001 of 5.6% as compared to the same period in fiscal 2000 was due to the lower gross margin rate of the CE&A business as well as higher sales discounts and higher manufacturing variances. PHI also incurred $0.3 million of expense related to the outsourcing of certain manufacturing processes during the first quarter of fiscal 2001. THE HIGH PERFORMANCE MODULAR POWER CONNECTORS SEGMENT reported net sales of $7.3 million during the first quarter of fiscal 2001 which was a decrease of $0.6 million or 8.3% from the first quarter of fiscal 2000. Adjusting net sales for the divestiture of the Carbolon product line during fiscal 2000, net sales are up $0.1 million or 1.5%. Overall, on a same sales basis, and after adjusting for unfavorable foreign exchange differences, first quarter sales of fiscal 2001 increased $0.2 million or 2.9% compared to the same period in fiscal 2000. Higher sales from telecom, data and uninterruptable power supplies ("UPS") markets were partially offset by lower sales in material handling markets. 19 The gross margin percentage on first quarter net sales in fiscal 2001 increased 1.1% as compared to the first quarter of fiscal 2000. The higher margin is attributable to the sale of the lower margin Carbolon business, coupled with Anderson's increased infiltration into the higher margin end markets of telecom, data and UPS. Anderson continues to improve results by focusing on their niche custom high power/current connectors and continue to have high quote activity in the telecom, data and UPS industries. Operating income remained flat at $1.4 million during the first quarter of fiscal 2001 as compared to the first quarter of fiscal 2000. THE CUSTOMIZED MONITORING INSTRUMENTATION SEGMENT reported net sales of $16.2 million for the first quarter of fiscal 2001 which was flat as compared to the same period in fiscal 2000. Operating income for the first quarter of fiscal 2001 declined $0.8 million or 41.5% compared to the first quarter of fiscal 2000. This decrease is the result of higher warranty costs on some discontinued Stewart Warner brand products, a shift toward lower margin products and an increase of receivable reserve provisions as well as certain price reductions effective during the fourth quarter of fiscal 2000. The decrease was partially offset by $0.2 million in research and development expense reduction during the first quarter of fiscal 2001 as compared to the same period in fiscal 2000. The Company continues to create operating efficiencies by combining the operations of Maxima-Juarez/El Paso with that of Maxima Technologies (Lancaster, PA). LIQUIDITY AND CAPITAL RESOURCES The Company's liquidity needs are primarily for working capital, capital expenditures and acquisitions. The Company's primary sources of liquidity have been funds provided by operations, proceeds from the sale of discontinued operations and asset sales, and proceeds from financing activities. The Company has made significant acquisitions, which are inherently subject to risk. The successful integration of the acquired operations and the substantial demands on the attention of senior management may adversely impact their ability to manage the Company's existing businesses. The Company maintains a $25.0 million revolving credit facility (the "Revolving Credit Facility") which is primarily maintained to fund the Company's working capital requirements and has a $10.0 million sub-limit for the issuance of standby letters of credit. On December 29, 1999, in connection with the Receivables Purchase Facility, the Revolving Credit Facility was amended to, among other things, to exclude as collateral certain domestic receivables sold pursuant to the Receivable Purchase Facility, described below, and included certain property,plant and equipment of certain domestic subsidiaries. As of April 29, 2000, the Revolving Credit Facility was amended (the "Third Amendment to Revolving Credit Facility") to among other things reduce the credit availability to $5.0 million upon the earlier of February 1, 2001 or the Sale of a Restricted Subsidiary, as defined, and to amend certain restrictive covenants, as defined. In addition, the amendment requires the Company to terminate or refinance the Receivables Purchase Facility upon the earlier of February 1, 2001 or the Sale of a Restricted Subsidiary, as defined. In connection with this amendment the Company intends to refinance the Revolving Credit Facility and the Receivables Purchase Facility prior to February 1, 2001 and the Company is currently actively seeking alternative financing arrangements. Borrowings outstanding under the Revolving Credit Facility as of July 29, 2000 were $12.3 million, and there were $2.9 million in letters of credit commitments outstanding resulting in credit availability under this facility of $6.7 million as of such date. The Revolving Credit Facility contains covenants restricting the ability of the Company's operating units to, among other things, pay dividends or make other restricted payments to the Company. On December 29, 1999, the Company entered into a Trade Receivables Purchase Facility (the "Receivables Purchase Facility") with High Voltage Funding Corporation, ("HV-FC"), a limited purpose subsidiary of the Company. Under this agreement, other domestic subsidiaries of the Company sell a defined pool of domestic trade accounts receivable ("Pool Assets"), and the related rights inherited of the Company and its domestic subsidiaries to HV-FC. The Receivables Purchase Facility allows the domestic subsidiaries to sell to the Company which, in turn, sells to HV-FC an undivided ownership interest in the Pool Assets, up 20 to a limit of $22.5 million. HV-FC owns all of its assets and sells participating interests in such accounts receivable to a third party which, in turn, purchases and receive ownership and security interests in those assets. As collections reduce accounts receivable included in the pool, the operating subsidiaries sell new receivables to HV-FC. The limited purpose subsidiary has the risk of credit loss on the receivables. At July 29, 2000, $15.8 million was utilized under the Receivables Purchase Facility. The proceeds from the sale were used to reduce borrowings and to fund operations and acquisitions. The proceeds are less than face value of accounts receivable sold, by an amount that approximates the cost that HV-FC would incur if it were to issue commercial backed paper by these accounts receivable. The discount from the face value, which amounted to $0.4 million at July 29, 2000, is accounted for as a loss on the sale of receivables and has been included in other income and expenses in the Company's Consolidated Statement of Operations. The Company's operating subsidiaries retain the collections and administrative responsibilities for the participating interests in the Pool Assets. As of April 29, 2000, the Receivables Purchase Facility was amended (the "First Amendment to Receivables Purchase Agreement") to conform certain restrictive covenants to the Third Amendment to the Revolving Credit Facility. In addition, the amendment to the Company's Revolving Credit Facility requires the Company to terminate the Receivables Purchase Facility on the earlier of February 1, 2001 or the sale of a Restricted Subsidiary. The Company is currently actively seeking to refinance this Facility. As of July 29, 2000, the Company had total indebtedness (including redeemable put warrants) of $217.2 million and mandatory redeemable preferred stock with an aggregate liquidation preference of $44.5 million. On December 22, 1999, the Company received the consent (the "Consent Solicitation") of the holders of its outstanding $155.0 million, 10 1/2% Senior Notes (the "Notes") due 2004, for the waiver of, and amendment to, certain provisions of the indenture governing the Notes (the "Indentures"). As more fully described in the Consent Solicitation, the Company entered into a series of transactions including (i) the acquisition of ASI; (ii) the simultaneous purchase by the Company of $8.5 million 5.0% unsecured notes of Nicole Corporation (the "Nicole Intercompany Notes"), a wholly owned subsidiary of the Company; (iii) the pledge by the Company of the Nicole Intercompany Notes to secure the Company's obligations under the Notes; and (iv) entrance by the Company into the Receivables Purchase Facility. The purpose of the waivers was to waive any default arising under the Indenture as a result of the completion of the ASI acquisition and the purchase by the Company of the Nicole Intercompany Notes. The principal purposes of the amendments were (i) to designate Nicole Corporation as an unrestricted subsidiary of the Company, as defined under the Indenture; (ii) to amend the amount available to the Company to make Restricted Payments; and (iii) to include as Permitted Investment certain arrangements made pursuant to the Receivables Purchase Facility. In consideration of the Consent Solicitation, the Company, (i) paid a Consent Fee and related costs of $3.5 million; (ii) increased the amount of interest payable on the Notes to 10 3/4% until such time the Company is able to incur additional indebtedness under the Indenture; and (iii) pledged as collateral for the Notes the PHI Eden Prairie facility and the Nicole Intercompany Notes. As of July 29, 2000, the Company had outstanding redeemable put warrants representing 6.25% of its fully diluted common stock. The holders of such warrants have the right, as of May 1, 2000, to require the Company to purchase all or any portion of such warrants or any shares of common stock issued upon the exercise of such warrants at the greater of (i) a valuation prepared by an independent financial advisor or (ii) a formula value calculated as 8.0x the Company's EBITDA (as defined therein) less preferred stock and debt outstanding plus excess cash. The ability of the Company to satisfy its obligations under existing indebtedness and preferred stock will be primarily dependent upon the future financial and operating performance of its operating units and upon the Company's ability to renew or refinance borrowings or to raise additional equity capital as necessary. In connection with the above, the Company intends to refinance the Revolving Credit Facility and the Receivables Purchase Facility prior to February 1, 2001 and is currently actively seeking alternative financing arrangements. The Company does not anticipate any significant principal payment obligations under any of its outstanding indebtedness prior to maturity of the Senior Notes other than in connection with a refinancing of such outstanding indebtedness. 21 The Company's working capital was $4.4 million and $7.2 million at July 29, 2000 and April 29, 2000, respectively. The Company's cash flows from continuing operations were $144,000 in the first quarter of fiscal 2001, as compared to a use of cash of $2.9 million for the same period in fiscal 2000. The Company invested $3.7 million in capital expenditures during the first quarter of fiscal 2001, including facility improvements at CE&A, Anderson and Robicon. NEW ACCOUNTING PRONOUNCEMENTS During 1998, the Financial Accounting Standards Board ("FASB") issued SFAS 133, "Accounting for Derivative Instruments and Hedging Activities", which establishes accounting and reporting standards for derivative instruments and for hedging activities. In June 1999, the FASB issued SFAS 137, "Deferral of the Effective Date of FASB Statement No. 133", to defer for one year the effective date of implementation of SFAS 133. SFAS 133, as amended by SFAS 137, is effective for fiscal years beginning after June 15, 2000, with earlier application encouraged. The Company does not believe adoption will have a material impact on its financial statement disclosures. In December 1999, the SEC issued Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. In March 2000, the SEC issued SAB 101A, to defer for one quarter the effective date of implementation of SAB No. 101 with earlier application encouraged. In June 2000, the SEC issued SAB 101B which defers the effective date of implementation of SAB 101 to the fourth fiscal quarter of fiscal 2001. The Company is currently evaluating the impact that SAB 101 will have on its financial reporting requirements. In March 2000, the Financial Accounting Standards Board issued FASB Interpretation No. 44, or FIN No. 44, "Accounting for Certain Transactions Involving Stock Compensation." This Interpretation clarifies the application of APB Opinion No. 25, "Accounting for Stock Issued to Employees" and is generally effective July 1, 2000, with certain conclusions in this Interpretation covering specific events that occur after either December 15, 1998, or January 12, 2000. To the extent that this Interpretation covers events occurring during the period after December 15, 1998, or January 12, 2000, but before the effective date of July 1, 2000, the effects of applying this Interpretation are recognized on a prospective basis from July 1, 2000. Management believes the adoption of FIN No. 44 will not have a material impact on our financial position, results of operations or cash flows. YEAR 2000 An issue which the Company faced was whether computer systems and applications would recognize and process the Year 2000 and beyond. The Company has not experienced any known material adverse impacts on our current products, internal information systems, and non information technology systems (equipment and systems) as a result of the year 2000 issue. In addition, the Company believes it had devoted sufficient resources to identify and monitor customers, suppliers and others whose failure to identify and remediate their internal systems or product offerings would have adversely affect the operations of the Company. However, there can be no assurance that the customers, suppliers and others will continue to operate without incurring Year 2000 compliance issues. Costs related to the Year 2000 issues are being expensed during the period in which they are incurred. The financial impact to the Company of implementing the systems changes necessary to become Year 2000 compliant has not been material to its business, operations, financial condition, liquidity and capital resources. Those estimates do not include any allocation with respect to time devoted by regular employees of the Company to these efforts, since the Company does not separately track that time. There are uncertainties as to the future costs associated with the Year 2000 date change but the Company believes that any future costs will not be material to its financial condition. 22 EURO CONVERSION On January 1, 1999, member countries of the European Monetary Union (EMU) began a three-year transition from their national currencies to a new common currency, the euro. In the first phase, the permanent rates of exchange between the members' national currency and the euro were established and monetary, capital, foreign exchange, and interbank markets were converted to the euro. National currencies will continue to exist as legal tender and may continue to be used in commercial transactions. By January 2002, euro currency will be issued and by July 2002, the respective national currencies will be withdrawn. The Company has significant operations in member countries of the EMU. The Company is implementing a plan to address the euro's impact on information systems, currency exchange rate risk and commercial contracts. Costs of the euro conversion to date have not been material. Management believes that future conversion costs will not have a material impact on the operations, cash flows or financial condition of the Company. However, there are uncertainties as to the future costs associated with the euro conversion which may affect the Company's expectations. Factors that could influence the amount and timing of future costs include the success of the Company in identifying systems and programs, the nature and amount of programming required to upgrade or replace each of the affected programs or systems, the availability, rate and magnitude of related labor and consulting costs and the ability of the Company to successfully renegotiate or amend its commercial contracts. ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The primary market risks for the Company is interest rate risk and foreign currency risk. Other risks dealing with contingencies are described in Note 4 to the Company's notes to the consolidated financial statements included under Item 1 provided elsewhere herein and in Item 1 of Part II of this report. INTEREST RATE RISK The Company's exposure to interest rate risk is limited to the Company's borrowing arrangements under the revolving credit facility. The interest rates on the Company's other long-term debt are fixed and primarily matures in fiscal 2005. The Company has not, to date, engaged in derivative transactions, such as interest rate swaps, caps or collars, in order to reduce it risk, nor does the Company have any plans to do so in the future. A 100 basis point increase in interest rates would have approximately a $200,000 negative impact on the earnings of the Company. FOREIGN CURRENCY RISK The Company manufactures product in the U.S., Italy, The Netherlands, Spain Germany, France, England and Mexico and sells products worldwide. Therefore the Company's operating results are subject to fluctuations in foreign currency exchange rates, as well as the translation of its foreign operations into U.S. dollars. The risks associated with operating in foreign currencies could adversely affect the Company's future operating results. Additionally, currency fluctuations could improve the competitive position of the Company's foreign competition if the value of the U.S. Dollar rises in relation to the local currencies of such competition. The Company sometimes enters into forward exchange contracts to manage exposure related to certain foreign currency commitments, certain foreign currency denominated balance sheet positions and anticipated foreign currency denominated expenditures. All forward exchange contracts are designated as and effective as a hedge and are highly inversely correlated to the hedged item. If a derivative contract terminates prior to maturity, the investment is shown at its fair value with the resulting gain or loss reflected in operating results. Gains and losses on contracts to hedge identifiable foreign currency commitments are deferred and accounted for as part of the related foreign currency transaction. Gains and losses on all other forward exchange contracts are included in current income. 23 PART II OTHER INFORMATION ITEM 1. - LEGAL PROCEEDINGS The nature of the Company's business is such that it is regularly involved in legal proceedings incidental to its business and the Company believes that none of these proceedings are material. In March 1998, the Company's Robicon Corporation subsidiary initiated litigation against Toshiba International Corporation ("Toshiba") in the United States District Court for the Western District of Pennsylvania alleging infringement of one of Robicon's Perfect Harmony patents. In June 1998, Toshiba filed suit against Robicon and several other defendants in the United States District Court for the Southern District of Texas alleging, among other things, false and disparaging comments concerning Toshiba, interference with contract, violation of the Texas Competition and Trade Practices Statute and civil conspiracy to restrict Toshiba's business and cause the wrongful termination of a purchase order of one of its customers. Damages under each section are claimed to be in excess of $75,000, the federal statutory minimum, in addition to a claim for punitive damages. In its suit, Toshiba has also claimed that Robicon is infringing a patent held by Toshiba and requested a declaratory judgment that Robicon's patent, which is the subject of the Pennsylvania action, is invalid. In March 1999, the Texas District Court dismissed without prejudice all claims except the alleged patent infringement by Robicon and the request for declaratory judgement. These claims were then transferred to the Western District of Pennsylvania. Also in March 1999, Toshiba filed a petition in Harris County, Texas in which it realleged the claims dismissed by the Texas district court, citing the additional costs by Toshiba to reinstate its purchase order and damages to its reputation not exceeding $5.0 million. On November 29, 1999, the Pennsylvania district court granted Robicon's motion to dismiss Toshiba's patent infringement claim against Robicon. The only remaining transferred claim is Toshiba's request for declaratory judgment. In November 1999, Toshiba filed a motion to dismiss without prejudice all of the claims pending in Harris County, Texas pursuant to a Tolling Agreement which permits Toshiba one (1) year to re-file its claims. In December 1999, the Texas state court granted Toshiba's motion. Certain other claims, suits and complaints have been filed or are pending against the Company. In the opinion of the Company, all such matters are without merit or are of such kind, or involve such amounts, as would not have a material effect on the consolidated financial position or the results of operations of the Company if resolved unfavorably to the Company. If estimates change, there is no assurances these items will not require additional accruals by the Company. ITEM 2. - CHANGES IN SECURITIES None. ITEM 3. - DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. - OTHER INFORMATION None. 24 ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule (b) Reports on Form 8-K (i) On May 7, 1999, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K, dated May 7, 1999, in which the Company reported under Item 2 of Form 8-K the disposition of certain assets relating to its Natvar Company business division. This report also included the following financial statements under Item 7 thereof: High Voltage Engineering Corporation and Subsidiaries Unaudited Pro Forma Condensed Consolidated Balance Sheet as of January 23, 1999 High Voltage Engineering Corporation and Subsidiaries Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Fiscal Year Ended April 25, 1998 High Voltage Engineering Corporation and Subsidiaries Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Nine Months Ended January 23, 1999 The Company also filed as part of Item 7 an exhibit copy of the Asset Purchase Agreement, dated as of April 8, 1999, among the Company, Natvar Holdings, Inc. and Tekni-Plex, Inc. (ii) On July 19, 1999, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K, dated July 19, 1999, in which the Company reported under Item 2 of Form 8-K the acquisition of all of the outstanding capital stock of Charles Evans & Associates. The Company also filed as part of Item 7 of this report an exhibit copy of the Stock Purchase Agreement, dated as of June 2, 1999, among (i) Physical Electronics, Inc., (ii) Charles Evans & Associates, (iii) the Trustee of the Charles Evans & Associates Employee Stock Ownership Plan, and (iv) the stockholders of Charles Evans & Associates named on Schedule A thereto. On September 17, 1999, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K/A, dated September 17, 1999, in which the Company reported under Item 2 of Form 8-K/A the acquisition of all of the outstanding capital stock of Charles Evans & Associates. The Company also filed as part of Item 7 of this report an exhibit copy of the Stock Purchase Agreement, dated as of June 2, 1999, among (i) Physical Electronics, Inc., (ii) Charles Evans & Associates, (iii) the Trustee of the Charles Evans & Associates Employee Stock Ownership Plan, and (iv) the stockholders of Charles Evans & Associates named on Schedule A thereto. (iii) On October 20, 1999, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K, dated October 20, 1999, in which the Company reported under Item 5 of Form 8-K that it has entered into a definitive purchase agreement to acquire all the outstanding common stock of Ansaldo Sistemi Industriali, S.p.A. ("ASI"), a wholly owned subsidiary of Finmeccanica, S.p.A. In connection with the announcement, the Company issued a press Release which is attached to the Form 8-K as exhibit 2.1. On February 2, 2000, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K, dated February 2, 2000, in which the Company reported under Item 2 of Form 8-K the acquisition of all of the outstanding capital stock of Ansaldo Sistemi Industriali, S.p.A. The Company also filed as part of Item 7 of this report an exhibit copy of the Share Purchase Agreement, dated as of October 7, 1999, by and between the Company and Ansaldo Invest, S.p.A. 25 SIGNATURES 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 hereto duly authorized. HIGH VOLTAGE ENGINEERING CORPORATION Dated: September 15, 2000 By: /s/ Joseph W. McHugh, Jr. ---------------------------------------- Joseph W. McHugh, Jr. Chief Financial Officer and Principal Accounting Officer 26

HIGH VOLTAGE ENGINEERING CORP 10-Q/A