UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-K

                [X] Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934.

     For the Year Ended December 31, 1998    Commission File Number 0-6866

                                       OR

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

                        For the transition period from to

                          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 and zip code)

       Registrant's telephone number, including area code: (508) 337-5111

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
                                                            $1 Par Value
                                                            (Title of Class)

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 90 days. YES [X] NO [ ]

Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein,  and will not be contained,  to the best
of  registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

The  aggregate   market  value  of  the   registrant's   common  stock  held  by
nonaffiliates of the registrant as of February 26, 1999,  (computed by reference
to the quoted selling prices of such stock in the over-the-counter  market), was
$430,281,855.

The number of shares outstanding of the registrant's Common Stock, $1 Par Value,
as of February 26, 1999, was 22,319,131.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Proxy Statement for the registrant's  1999 Annual Meeting
of  Stockholders  to be filed  with the SEC in March  1999 are  incorporated  by
reference into Part III, Items 10-12.

<PAGE>
HELIX TECHNOLOGY CORPORATION                                  10-K Annual Report
Commission File No. 0-6866                                    For the Year Ended
                                                               December 31, 1998

                                     PART I

Item 1. Business

     General  HELIX  TECHNOLOGY   CORPORATION   (the   "Company"),   a  Delaware
corporation   organized  in  1967,  provides  critical  enabling  vacuum  system
technology to a broad range of electronic component  manufacturers,  principally
for the production of semiconductors, disk drives and flat panel displays.

The Company's  On-Board  technology is a  comprehensive  package of hardware and
software that can integrate both Helix and non-Helix vacuum products.  (On-Board
is a  registered  trademark  of Helix  Technology  Corporation.)  These  systems
provide original equipment  manufacturers the flexibility to rapidly implement a
full  range of  process-driven  solutions  and  end-users  performance-enhancing
process  controls,  advanced  diagnostics  and  communications  capabilities  to
increase system uptime and to lower the cost of ownership.

The Company's  On-Board  Cryopump product  continues to be the industry standard
high-vacuum  pump for both the PVD (Physical Vapor  Deposition or  "sputtering")
and ion implantation  markets. Its On-Board Waterpumps,  On-Board Turbopumps and
On-Board  TurboPlus give the Company products to support the CVD (Chemical Vapor
Deposition) and etch processes.

The  Company's   STABIL-ION  and  CONVECTRON  vacuum  measurement   systems  are
considered industry standards and are used in the PVD, ion implantation, CVD and
etch processes.  (STABIL-ION  and CONVECTRON are registered  trademarks of Helix
Technology   Corporation.)  The  Company's  vacuum  gauging  products  are  also
integrated into analytical instruments, primarily mass spectrometers.

The Company maintains Customer Support Centers  strategically located throughout
the world to provide replacement parts,  overhaul,  repair and upgrade services.
The Company's  unique GUTS  (Guaranteed  Up-Time Support) rapid response system,
which has been the  industry  benchmark  since 1985,  is designed to assure that
users of the Company's  products have direct,  twenty-four-hour-a-day  access to
the resources of the Customer Support Centers.  (GUTS is a registered  trademark
of Helix Technology Corporation.)

The Company encounters  competition in both domestic and foreign markets for its
products.  Competition comes from smaller firms and from larger firms which have
greater total resources than the Company.  Customer  service,  product  quality,
performance and price are all factors in selling the Company's products.

The Company's  business is, generally,  not dependent on the availability of raw
materials or components from any single source. Certain components, however, may
be available from only one or two qualified sources.  The Company's policy is to
develop alternative  sources for components and, where possible,  to avoid using
scarce raw materials in its products.


                                      - 2 -
<PAGE>
                                 

                                     PART I

Item 1. Business  (continued)

The Company holds many U.S. and foreign patents in the fields of vacuum pumping,
gauging and cryogenics that it believes are significant to its operations. These
patents  expire at various  years  through  2016.  No patents  which the Company
considers  significant  expire  during  the  next  five  years.  Trademarks  are
considered  important to the Company's business.  These trademarks are protected
by  registration in the United States and other countries in which the Company's
products are marketed.

The Company and Ulvac Corporation of Chigasaki,  Japan, operate a joint venture,
Ulvac  Cryogenics,  Inc.  ("UCI") formed in 1981,  which  manufactures and sells
cryogenic vacuum pumps, principally to Ulvac Corporation.  Each company owns 50%
of UCI and made initial cash  investments  of  approximately  $100,000,  with no
subsequent cash investments.  The joint venture  arrangement  includes a license
and  technology  agreement  from the Company and a management  and  consultation
agreement from Ulvac Corporation.  The Company and Ulvac Corporation essentially
share control of the joint venture.

On May 7, 1998, the Company acquired  Granville-Phillips Company ("GPC"). GPC is
a world leader in the development and manufacture of instrumentation  for vacuum
measurement  and  control  used  principally  in the  semiconductor,  flat panel
display and disk drive manufacturing processes.

     Backlog - The backlog of orders believed to be firm was approximately  $4.8
million at December 31, 1998, compared to $7.0 million at December 31, 1997. The
Company expects to recognize  revenues from  essentially all of the December 31,
1998, backlog during 1999.

     Research and  Development  - The Company  expended  $10,106,000  in 1998 on
research and development efforts compared to $11,540,000 and $10,213,000 in 1997
and  1996,  respectively.  These  expenditures  reflect  development  activities
relating to product enhancements and new products for commercial applications.

     Employment  - Total  employment  in the  Company at the end of 1998 was 457
compared  with  606  and 503 at the end of 1997  and  1996,  respectively.  This
includes  temporary  employees of eight at the end of 1998 compared to 65 and 27
in 1997 and 1996, respectively.

     Environmental Affairs - Compliance with federal, state and local provisions
relating to  environmental  quality has not had,  and is not expected to have, a
material impact upon capital expenditures,  earnings or the competitive position
of the Company.

     Financial Information about One Operating Segment and Major Customers - The
Company's one operating segment is cryogenic and vacuum equipment. The Company's
largest  customer is Applied  Materials,  the world's  largest  manufacturer  of
semiconductor capital equipment,  representing 20%, 30% and 28% of net sales for
1998, 1997 and 1996, respectively. Information concerning the Company's industry
segment  information and different  geographical areas are included in Note G of
Notes to Consolidated Financial Statements included elsewhere in this report.


                                      - 3 -
<PAGE>
                                    

                                     PART I

Item 2. Properties

The Company occupies  approximately 230,000 square feet worldwide,  as described
in the table below.

                            Size    Lease
       Location          (Sq. Ft.) Expires              Functions
       --------          --------- -------              ---------

Mansfield, Massachusetts  155,000   2006    Corporate headquarters, engineering,
                                            manufacturing, sales and
                                            marketing and administration
Boulder, Colorado          22,000   Owned   Engineering, manufacturing, and
                            9,000   2001    sales and marketing
Santa Clara, California    11,000   2000    Sales office, customer support and
                                            repair depot
Austin, Texas              12,000   1999    Sales office and customer support
Phoenix, Arizona            1,300   2000    Sales office and customer support
Scotland                    5,300   2020    Sales office and customer support
Germany                     2,500   2000    Sales office and customer support
France                      6,400   2000    Sales office, customer support and
                                            repair depot
Japan                       5,160   2000    Sales office and customer support

The Company  believes that its existing  facilities will be adequate to meet its
currently  anticipated  requirements and that suitable  additional or substitute
facilities  will  be  available  as  required.   The  lease  on  the  Mansfield,
Massachusetts,   facility  provides  for  renewal  options  for  up  to  fifteen
additional years.

Item 3. Legal Proceedings

In the normal  course of  business,  the  Company  is  subject to various  legal
proceedings and claims.  The Company believes that the ultimate outcome of these
matters will not have a material effect on its financial statements.

Item 4. Submission of Matters to a Vote of Security Holders

During the quarter ended  December 31, 1998, no matters were submitted to a vote
of security holders through the solicitation of proxies or otherwise.











                                      - 4 -

<PAGE>


                                     PART II

Item 5. Market for the  Registrant's  Common Stock and Related  Security  Holder
Matters

The  Company's  common  stock is traded on the NASDAQ  National  Market  (NASDAQ
symbol HELX). At December 31, 1998, there were 22,319,131 shares of common stock
outstanding and approximately 854 common stockholders of record.

Price Range of Common Stock and Cash Dividend Per Common Share

The price range and cash dividend per common share of the Company's common stock
by quarter are:

                                  First      Second       Third       Fourth
        1998                     Quarter     Quarter     Quarter      Quarter
-----------------------------------------------------------------------------
Stock price
  High                            $25.13     $20.63       $15.50      $14.00
  Low                             $17.75     $14.75       $ 9.25      $ 6.81
Cash dividends per share (1)      $  .21     $  .21       $  .21      $  .12

                                  First      Second       Third       Fourth
        1997                     Quarter     Quarter     Quarter      Quarter
-----------------------------------------------------------------------------
Stock price
  High (2)                        $18.63     $21.00       $33.38      $31.53
  Low (2)                         $14.13     $15.00       $19.50      $17.50
Cash dividends per share (1)(2)   $ .175     $ .175       $ .175      $  .21

(1)   Cash dividends per share declared in periods prior to the acquisition of
Granville-Phillips  Company  are  based on shares  outstanding  at that time and
therefore do not reflect the 2,383,000 shares issued as part of the acquisition.
(2)   Market prices and per share data reflect a two-for-one common stock split
effective November 1997.

The Board of Directors  declared a quarterly  cash  dividend of $0.12 per common
share payable on March 11, 1999, to common  stockholders  of record at the close
of business on February 25, 1999.






                                      - 5 -

<PAGE>


                                     PART II


Item 6. Selected Financial Data

The following table  summarizes  certain selected  consolidated  financial data,
which should be read in conjunction with  "Management's  Discussion and Analysis
of  Financial   Conditions  and  Results  of   Operations"   and  the  Company's
consolidated  financial  statements and related notes included elsewhere herein.
In  connection  with the  acquisition  of  Granville-Phillips  Company  in 1998,
accounted for as a pooling of interests,  all  prior-period  financial  data has
been restated to include the impact of the combination.
<TABLE>
<CAPTION>
(in thousands except per share data)    1998        1997       1996      1995     1994
------------------------------------------------------------------------------------------
     
<S>                                  <C>         <C>        <C>        <C>        <C>     
Net sales ........................   $ 95,345    $157,076   $151,665   $145,370   $103,176

Net income (loss) (1) ............   $ (1,920)   $ 25,544   $ 25,126   $ 24,694   $ 11,786

Basic net income (loss)
   per share (2) .................   $  (0.09)   $   1.15   $   1.15   $   1.14   $   0.55

Diluted net income (loss)
   per share (2) .................   $  (0.09)   $   1.14   $   1.14   $   1.12   $   0.54

Cash dividends per share (1)(2)(3)   $    .75    $  0.735   $   0.65   $   0.29   $  0.145

Total assets .....................   $ 75,652    $ 96,219   $ 83,005   $ 79,509   $ 53,173

Basic shares (2) .................     22,262      22,151     21,788     21,592     21,260
Diluted shares (2) ...............     22,262      22,353     22,096     22,124     21,812

(1)   Net loss for the year ended December 31, 1998, reflects merger and other 
special charges of $3,546,000  related to the acquisition of  Granville-Phillips
Company and  restructuring  and other special  charges of $2,500,000  related to
work  force  reductions,  exit costs for a leased  facility  and  impairment  of
certain assets. (See Note 1 of Notes to Consolidated Financial Statements.)
(2)   All share and per share data reflect a two-for-one common stock split 
effective November 1997.
(3)   Cash dividends per share declared in periods prior to the acquisition are
based on  shares  outstanding  at that time and  therefore  do not  reflect  the
2,383,000 shares issued as part of the acquisition.

</TABLE>




                                      - 6 -

<PAGE>

                                     PART II

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

On May 7, 1998, the Company acquired  Granville-Phillips Company ("GPC"). GPC is
a world leader in the development and manufacture of instrumentation  for vacuum
measurement  and  control  used  principally  in the  semiconductor,  flat panel
display and disk drive  manufacturing  processes.  The transaction was accounted
for as a pooling of interests;  and  accordingly,  the financial  results of the
Company for all periods  presented  include the financial  position,  results of
operations, stockholders' equity, comprehensive income and cash flows of GPC.
 
Results of Operations - 1998 Compared with 1997

Net sales for 1998 were $95.3  million  compared  to $157.1  million in 1997,  a
decrease of $61.8 million.  This decline is  attributable to the excess capacity
in the worldwide semiconductor industry, combined with the economic slump in the
Pacific Rim.

Total gross profit as a percentage of net sales was 39.8% for 1998,  compared to
48.2% for the prior  year.  The  reduction  in gross  margin  was  caused by the
substantial  decline in  production  volume and the  related  increase in excess
capacity and manufacturing unit costs.

Research and  development  expenses for 1998 were $10.1  million or 10.6% of net
sales,  compared  to $11.5  million or 7.3% of net sales for 1997.  As  industry
conditions worsened during the year, the Company delayed certain expenditures on
projects it believed were not critical during the downturn.  Despite the decline
in the semiconductor  capital equipment  business  environment and the continued
weakness of the Asian  markets,  the  Company  continues  to fund its  long-term
strategic  development  programs.  These  actions are  expected to position  the
Company  for  growth as the  economics  improve in the  worldwide  semiconductor
industry.

Selling,  general and administrative expenses decreased in 1998 to $26.6 million
from $30.9  million in the prior year.  This  reduction in spending is primarily
attributable  to a decrease in  variable  compensation,  lower sales  commission
expense and a reduction in advertising and promotional  expenditures,  which was
partially offset by expenses  associated with the opening of the Company's sales
office in Japan.

During  1998,  the  Company  incurred  certain  special  charges.  In the second
quarter, the Company acquired GPC in a transaction accounted for as a pooling of
interests.   Direct   acquisition   costs,   including   professional  fees  and
compensation  expense for  various  incentive  plans for certain GPC  employees,
amounted to $3.5 million and were charged against results of operations.  During
the third quarter, the Company restructured its domestic operations to eliminate
non-strategic  spending,  while  redirecting  resources to the Company's  global
customer support structure and other strategic  initiatives and took a charge of
$2.5 million. The restructuring  included provisions for termination benefits of
$1.3 million paid to  approximately  80 personnel,  $1.0 million relating to the
closing of a leased  facility  and $0.2  million for the  impairment  of certain
assets.  Approximately $0.7 million of the charge was non-cash,  relating to the
write-off  of certain  leasehold  improvements  in the closed  facility  and the
impairment  of the assets.  The Company  expects that these changes will provide
approximately $5.0 million of



                                      - 7 -
                                  
<PAGE>

                                     PART II

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued)
 
Results of Operations - 1998 Compared with 1997 (continued)

annual cost savings in 1999. At December 31, 1998, $0.9 million of restructuring
and  special  charges  remained  in other  accrued  expenses,  which the Company
expects to be paid or amortized by the end of the third quarter of 1999.

As a result of the decline in net sales and the special charges  recorded during
1998,  the Company  experienced an operating loss of $4.8 million or 5.0% of net
sales,  compared to an operating  profit of $33.3  million or 21.2% of net sales
for the prior year.

Royalty and equity income from the Company's joint venture in Japan decreased by
$0.8 million in 1998 due to the downturn in the Japanese  semiconductor  capital
equipment market.

Interest and other income for 1998 was $1.2 million  compared  with $1.8 million
for 1997,  reflecting lower cash, cash equivalent and investment balances during
the year.

The Company  recorded an income tax benefit of $0.7 million for 1998 compared to
a tax provision of $11.3 million for the previous year. In 1998, the Company had
an operating loss before taxes due to merger, restructuring and special charges.
The Company  benefited from research and development and other tax credits.  The
1997  provision of 30.6% is less than the federal  statutory rate of 35% because
Granville-Phillips  Company was an  S-Corporation  prior to the acquisition and,
therefore, not subject to federal income tax.

Liquidity and Capital Resources

Net cash provided by operating  activities was $7.4 million in 1998. The Company
invested $2.6 million, primarily in machinery and equipment,  during 1998. As of
December  31,  1998,   there  are  no   anticipated   material   future  capital
expenditures. Cash dividends paid to stockholders during 1998 were $16.1 million
compared to $16.3  million for 1997. In October  1998,  the  Company's  Board of
Directors decided to reduce the quarterly dividend from $.21 per common share to
$.12  per  common  share  due  to  the  uncertain  business  environment  in the
semiconductor capital equipment market.

At December 31, 1998, the Company had informal bank money market lines of credit
of $12.0 million.  There have been no borrowings  under these  agreements  since
1993. Since the agreements are informal and unused, terms would be negotiated as
necessary.  The Company does not anticipate  utilizing  these lines of credit in
the near term.

The Company  manages its foreign  exchange  rate risk arising from  intercompany
foreign currency  denominated  transactions  through the use of foreign currency
forward contracts. The gains and losses on these transactions are not material.



                                      - 8 -


<PAGE>

                                     PART II

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued)
 
Liquidity and Capital Resources (continued)

The Company  believes  that  existing  cash,  cash  equivalents  and  investment
balances,  anticipated  cash flow from  operations  and  funds  available  under
existing  credit  lines  will be  adequate  to fund  operations  and that it has
further financing options should additional funds be required.

Results of Operations - 1997 Compared with 1996

Net sales for 1997 were $157.1  million  compared to $151.7  million in 1996, an
increase of $5.4 million.  The growth in sales  resulted  primarily  from record
sales of the Company's  cryogenic  vacuum  products and  instruments  for vacuum
measurement  and  control,  used  principally  by  semiconductor   manufacturers
worldwide.  Net sales showed sequential  quarterly  improvement during the first
three quarters of 1997 as the global market for semiconductor  capital equipment
strengthened.  Net sales  decreased in the fourth quarter due to the downturn in
the worldwide semiconductor industry.

Total gross profit as a percentage  of net sales was 48.2% in 1997 compared with
48.0% in 1996. The increase in gross profit was attributable to the efficiencies
derived from the Company's high  production  volumes and ongoing  cost-reduction
initiatives.

Research and  development  expenses  increased  to $11.5  million or 7.3% of net
sales for 1997  compared  to $10.2  million or 6.7% of net sales for 1996.  This
increase  reflects  continued  funding  by the  Company of  long-term  strategic
development programs in response to the increasing demand from the semiconductor
industry for new products and product enhancements.

Selling, general and administrative expenses increased to $30.9 million or 19.7%
of net sales for 1997  compared  to $27.8  million or 18.3% of net sales for the
prior year. This increase is primarily due to increases in salaries and variable
compensation expense, and to increased sales and marketing efforts worldwide.

Royalty and equity  income from the Company's  joint  venture in Japan  improved
$0.3 million over 1996.

Interest and other income for 1997 was $1.8 million  compared  with $1.5 million
for 1996, reflecting higher cash and cash equivalent balances during the year.

The Company's  provision for income taxes was $11.3 million and $12.6 million in
1997 and 1996,  respectively.  The difference  between the statutory federal tax
rate of 35% and the Company's effective tax rate of 30.6% and 33.4% for 1997 and
1996,  respectively,  is  principally  due to the  impact of  Granville-Phillips
Company's  status as an  S-Corporation,  which is not subject to federal  income
taxes.  Also in 1997, the Company  generated a greater  benefit from tax credits
for research and development expenditures.




                                      - 9 -
<PAGE>

                                     PART II

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued)

New Accounting Pronouncements

In  June  1998,  the  Financial  Accounting  Standards  Board  issued  Financial
Accounting Standards No. 133 (SFAS 133),  "Accounting for Derivative Instruments
and Hedging  Activities."  The  adoption of SFAS 133 in 2000 is not  expected to
have a material impact on the Company's financial statements.
 
Certain Factors That May Affect Future Results

From time to time,  information provided by the Company,  statements made by its
employees  or  information  included  in its  filings  with the  Securities  and
Exchange  Commission may contain  statements  that are not historical  facts but
that are  "forward-looking  statements"  involving risks and  uncertainties.  In
particular,  statements in  "Management's  Discussion  and Analysis of Financial
Condition and Results of Operations"  relating to the Company's shipment levels,
profitability,  sufficiency  of  capital to meet  working  capital  and  capital
expenditure requirements may be forward-looking  statements. The words "expect,"
"anticipate,"  "internal,"  "plan,"  "believe,"  "seek,"  "estimate" and similar
expressions  are  intended to identify  such  forward-looking  statements.  Such
statements are not guarantees of future  performance  and involve certain risks,
uncertainties  and assumptions  that could cause the Company's future results to
differ materially from those expressed in any forward-looking statements made by
or on behalf of the Company.  Many such factors are beyond the Company's ability
to control or predict.  Readers  are  accordingly  cautioned  not to place undue
reliance on  forward-looking  statements.  The Company  disclaims  any intent or
obligation  to  update  publicly  any  forward-looking  statements,  whether  in
response to new  information  or future events or otherwise.  Important  factors
that may cause the Company's actual results to differ from such  forward-looking
statements include, but are not limited to, the factors discussed below.

The Company's  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
affected the Company's  results of  operations.  There can be no assurance  that
developments  in  the  semiconductor  industry  or the  semiconductor  equipment
industry will occur at the rate or in the manner expected by the Company.

In addition to the cyclical nature, risks and uncertainties of the semiconductor
industry,  the Company faces the following risks and uncertainties:  the need to
continuously develop, manufacture and gain customers' acceptance of new products
and product  enhancements;  dependence  on a limited  number of  customers  (the
Company's ten largest  customers  accounted for  approximately 39% of net sales,
and its largest customer,  Applied  Materials,  Inc, accounted for approximately
20% of net sales in 1998);  its  ability  to  attract  and  retain  certain  key
personnel;  the  ability  of the  Company to protect  its  technology  assets by
obtaining and enforcing patents; 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


                                     - 10 -
<PAGE>

                                     PART II

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued)

Certain Factors That May Effect Future Results (continued)

foregoing and other factors, the Company may experience material fluctuations in
its  future  operating  results  on a  quarterly  or annual  basis  which  could
materially affect its business,  financial  position,  results of operations and
stock price.

Year 2000

The Year 2000 problem  refers to the  potential  for  information  systems to be
unable to correctly  recognize  and process  calendar  dates and  date-sensitive
information  involving  dates  on or after  January  1,  2000.  The  Company  is
addressing  its Year 2000 risk within  four  categories:  1)  internal  business
software,  2) internal  systems  (hardware and  software,  exclusive of business
software),  3) external  suppliers of goods and  services,  and 4) the Company's
products.

INTERNAL  BUSINESS  SOFTWARE.  The  Company's  internal  business  systems  that
collectively  provide the major processing  functions for its operations are not
Year 2000 compliant. The  remediation/replacement  of those systems was begun in
mid-1998 and is scheduled for completion by March 1999.

INTERNAL  SYSTEMS.  The Company  utilizes  other systems  (exclusive of business
systems   discussed  above)  to  perform  certain  data  processing,   including
computer-based programs,  networking equipment,  laboratory equipment,  building
security and atmosphere  control  systems,  fax and copy  machines,  and others.
Starting in the first  quarter of 1998,  the Company  initiated a  comprehensive
program to address Year 2000 problems with such internal systems, consisting of:
forming a project team of representatives from across the Company;  inventorying
and  assessing  each  internal  system to determine  whether it was compliant or
non-compliant  to Year 2000  problems;  and  developing  a plan to  address  all
non-compliant systems.

The  Company is on  schedule  with its  remediation  efforts  and  expects to be
completed by June 1999.  Testing of each remediated  initial system is performed
at the time of such remediation. Additional testing will be performed during the
second  half of 1999,  focusing  on those  systems  classified  as high  risk of
failure as well as critical to the business.  Independent organizations might be
employed  to assist  the  Company  as needed to test and  verify  such  internal
systems are Year 2000 compliant.

EXTERNAL SUPPLIERS OF GOODS AND SERVICES.  Starting in January 1998, the Company
undertook a program to  understand  and mitigate  Year 2000  problems with those
external suppliers who are crucial to the Company's operations,  including parts
providers,   carriers,   telecommunications  providers,   utilities,   financial
institutions  and  others.  A series  of  questionnaires  was  sent to  external
suppliers.  As a result,  the Company has  determined  that the  majority of the
Company's  suppliers are either Year 2000  compliant or are aware of the problem
and have an active program  underway to address their particular  problems.  For
each  supplier  who is not Year  2000  compliant,  the  Company  has  defined  a
contingency  plan in case the supplier  cannot or will not resolve its Year 2000
problems in a timely


                                     - 11 -
<PAGE>

                                     PART II

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations (continued)

Year 2000 (continued)

manner.  The plan elements differ for each supplier but generally consist of one
or more actions such as: work with the supplier to help resolve  their Year 2000
problems;  develop alternative  suppliers for sole-source  components;  redesign
products  to  negate  the need for  non-compliant  suppliers;  maintain  back-up
inventories of critical  components to protect against temporary  disruptions in
supply;  evaluate  alternative  component and product delivery  mechanisms;  and
monitor those  suppliers  who have active Year 2000 programs  underway to verify
progress against those suppliers' scheduled milestones.

The Company will continue these  monitoring  activities until satisfied that all
crucial suppliers are Year 2000 compliant. In addition, the Company has enhanced
its new supplier  qualification process to require new suppliers to be Year 2000
compliant in all aspects of their operations and products.

THE COMPANY'S  PRODUCTS.  Certain of the  Company's  products  contain  embedded
software.  In 1997, the Company  performed an assessment of all such software to
determine Year 2000 compliance. As a result, the Company believes that there are
no material  issues  regarding  the use of its  products.  The Company  also has
enhanced its product  development  and testing  processes to ensure that all new
products are Year 2000 compliant.

The Company  estimates that the total cost  associated  with addressing the Year
2000 problem is approximately $0.9 million,  of which approximately $0.7 million
has been incurred to date. Of the total cost, approximately $0.7 million relates
to new  systems  and has  been  capitalized,  and the  remainder  has or will be
expensed as incurred. These cost estimates are approximate and subject to change
due to unforeseen internal or external conditions.

While  the  Company  believes  that it is  addressing  all  material  Year  2000
problems,  there are a number of risks  associated  with Year 2000, only some of
which are within the  control of the  Company.  These risks  include  unforeseen
difficulties in completing certain Year 2000 programs,  an incomplete  inventory
of internal  systems,  and the failure of one or more  suppliers  to  adequately
address the Year 2000 problem. The Company's Year 2000 efforts are meant to help
manage and mitigate these risks.





                                     - 12 -

<PAGE>

                                     PART II

Item 7a.    Quantitative and Qualitative Disclosures about Market Risk

A portion of the  Company's  business is conducted  outside of the United States
through  its  foreign  subsidiaries.  The foreign  subsidiaries  maintain  their
accounting  records in their local  currencies.  Consequently,  period-to-period
comparability  of results of operations is affected by  fluctuations in exchange
rates. To reduce the risks associated with foreign  currency rate  fluctuations,
the Company has entered into forward exchange contracts on a continuing basis to
hedge the currency  exposures.  Gains and losses on forward  exchange  contracts
qualifying for hedge  accounting  were  immaterial  for years  presented and are
classified  in cost of sales.  The  Company  plans to  continue  to use  forward
exchange  contracts to mitigate the impact of exchange  rate  fluctuations.  The
potential  fair  value loss for a  hypothetical  10%  adverse  change in forward
currency  exchange rates at December 31, 1998, would be $240,000.  The potential
loss  was   estimated  calculating  the  fair   value  of the  forward  exchange
contracts at December 31, 1998,  and  comparing  that with the value  calculated
using the hypothetical forward currency exchange rates.







                                     - 13 -

<PAGE>

                                    
                                     PART II

Item 8. Financial Statements and Supplementary Data

                 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
                       SCHEDULES COVERED BY THE REPORT OF
                             INDEPENDENT ACCOUNTANTS

                                                                         Page(s)

Report of Independent Accountants..........................................23

Consolidated Financial Statements of Helix Technology Corporation

     Consolidated Balance Sheets as of December 31, 1998 and 1997..........24

     Consolidated Statements of Operations for the Years Ended
        December 31, 1998, 1997 and 1996...................................25

     Consolidated Statements of Stockholders' Equity
        for the Years Ended December 31, 1998, 1997 and 1996...............26

     Consolidated Statements of Cash Flows for the Years
        Ended December 31, 1998, 1997 and 1996.............................27
 
     Consolidated Statements of Comprehensive Income (Loss) for the 
        Years Ended December 31, 1998 and 1997                             28

     Notes to Consolidated Financial Statements.... .......................29-42

Report of Independent Accountants..........................................43

Quarterly Results (Unaudited)..............................................44

Financial Statement Schedule for the Years Ended December 31, 1998, 1997
and 1996
 
     II.   Valuation and Qualifying Accounts...............................45

Schedules other than those listed above have been omitted since they are either
inapplicable or not required.

Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

The  Company  did  not  change  accountants  or  file a  Form  8-K  reporting  a
disagreement  on  an  accounting  principle,  practice  or  financial  statement
disclosure during the two-year period ended December 31, 1998.


                                     - 14 -

<PAGE>


                                   PART III

Item 10.  Directors and Executive Officers of The Registrant

Officers are elected  annually by the Board and serve at the  discretion  of the
Board. Set forth below is information  regarding the current Executive  Officers
of the Company who are not Directors of the Company.

Mr. Robert E. Anastasi is 52 and has served the Company as Senior Vice President
since July 1997 and Vice President since June 1991.

Mr. Michael  El-Hillow is 47 and has served the Company as Senior Vice President
and  Chief  Financial  Officer  since  July  1997 and Vice  President  and Chief
Financial  Officer since April 1997. He was Vice  President and Chief  Financial
Officer of A.T. Cross Company from January 1991 until April 1997.

Mr.  Christopher Moody is 43 and has served the Company as Senior Vice President
since  August  1997.  He  was  Vice  President  of  Japan  Sales  at  KLA-Tencor
Corporation  from April 1996 until  August  1997 and  Director  of Sales for KLA
Instruments  Wafer  Inspection  Division  from January 1995 until April 1996. He
served as National Sales Manager at Eaton Corporation,  Semiconductor  Equipment
Division, from 1993 until January 1995.

Mr.  Richard  J.  Paynting  is 51 and has  served  the  Company  as Senior  Vice
President  since July 1997 and Vice President since August 1996. He was Director
of New Products at Bose Corporation from May 1991 until August 1996.

Additional information required by this item is incorporated herein by reference
to the registrant's  proxy statement for its 1999 Annual Meeting of Stockholders
which will be filed with the SEC in March 1999, pursuant to Regulation 14A.

Item 11.  Executive Compensation

Information  required by this item is  incorporated  herein by  reference to the
registrant's  proxy statement for its 1999 Annual Meeting of Stockholders  which
will be filed with the SEC in March 1999, pursuant to Regulation 14A.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Information  required by this item is  incorporated  herein by  reference to the
registrant's  proxy statement for its 1999 Annual Meeting of Stockholders  which
will be filed with the SEC in March 1999, pursuant to Regulation 14A.

Item 13.  Certain Relationships and Related Transactions

There were no related-party transactions.





                                     - 15 -


<PAGE>

                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

                                                                  Page Number(s)
                                                                  or
                                                                  Incorporation 
                                                                  by
Description                                                       Reference to
-----------                                                       --------------

(a)  Financial Statements, Schedules & Exhibits:

     (1), (2) The Consolidated Financial Statements and required  14
            schedules are indexed under Item 8.

     (3) Exhibits required by Item 601 of SEC Regulation S-K.
         (Exhibit numbers refer to exhibit number on Table I.)

         2.1  Agreement and Plan of Merger dated as of            Exhibit 2.1 to
              April 16, 1998 among Helix Technology Corporation,  the Company's
              Helix Acquisition Corporation, Granville-Phillips   Form 8-K filed
              Company and certain principal stockholders of       May 15, 1998.
              Granville-Phillips Company.

         2.2  Registration Rights Agreement dated May 7, 1998.    Exhibit 2.2 to
                                                                  the Company's 
                                                                  Form 8-K filed
                                                                  May 15, 1998.

         2.3  Escrow Agreement dated May 7, 1998.                 Exhibit 2.3 to
                                                                  the Company's 
                                                                  Form 8-K filed
                                                                  May 15, 1998.

         3.   Articles of Incorporation                           Exhibit 3 to
              Restated articles of incorporation as amended       the Company's 
              on May 7, 1987, and May 18, 1988.                   Form 10-Q for 
                                                                  the Quarter 
                                                                  Ended
                                                                  September 30,
                                                                  1988.

              By-laws                                             Exhibit (3)-3
              As amended on December 10, 1986, and                to the 
              December 9, 1987.                                   Company's Form
                                                                  10-K for the
                                                                  Year Ended
                                                                  December 31, 
                                                                  1987.

         4A.  Description of Common Stock                         Exhibit 3 to
                                                                  the Company's 
                                                                  Form 10-Q for 
                                                                  the Quarter 
                                                                  Ended
                                                                  September 30, 
                                                                  1988.



                                     - 16 -
                                    
<PAGE>

                                     PART IV

Item  14.  Exhibits,  Financial  Statement  Schedules  and  Reports  on Form 8-K
(continued)

                                                                  Page Number(s)
                                                                  or 
                                                                  Incorporation 
                                                                  by
Description                                                       Reference to
-----------                                                       --------------

         4B.  Description of Preferred Stock                      Exhibit 3 to
                                                                  the Company's
                                                                  Form 10-Q for 
                                                                  the Quarter 
                                                                  Ended
                                                                  September 30, 
                                                                  1988.

         10.  Material Contracts:

         (1)  Basic agreement between the Company and             Exhibit 10.13 
              Ulvac Corporation dated August 17, 1981.            to a 
                                                                  Registration
                                                                  Statement on 
                                                                  Form S-2, 
                                                                  Registration
                                                                  No. 2-84880.

         (2)  Lease agreement dated July 24, 1984,                Exhibit
              between WRC Properties, Inc. as Lessor              10-(14) to
              and the Company as Lessee.                          the Company's
                                                                  Form 10-K for
                                                                  the Year Ended
                                                                  December 31,
                                                                  1984.

         (3)  Lease agreement dated May 23, 1991, between         Exhibit
              Mansfield Corporate Center Limited                  10-(14) to the
              Partnership as Lessor and the Company               Company's Form
              as Lessee.                                          10-K for the 
                                                                  Year Ended
                                                                  December 31, 
                                                                  1991.

         (4)  Lease agreement dated May 21, 1996 between
              LakeCenter Plaza, Ltd., LLLP as Lessor and
              the Company as Lessee.

         (5)  Lease agreement dated August 7, 1998 between
              Mitsubishi Jisho Co., Ltd. as Lessor and the
              Company as Lessee.
 
 

 




                                     - 17 -

                                    
<PAGE>

                                     PART IV

Item  14.  Exhibits,  Financial  Statement  Schedules  and  Reports  on Form 8-K
(continued)

                                                               Page Number(s)
                                                               or
                                                               Incorporation 
                                                               by
Description                                                    Reference to
-----------                                                    -----------------

         Compensation Plans, Contracts and Arrangements:

         (6)  The Company's 1996 Equity Incentive Plan.        Exhibit A to
                                                               the Company's
                                                               Proxy 
                                                               Statement for
                                                               its 1996
                                                               Annual Meeting
                                                               of 
                                                               Stockholders
                                                               held on 
                                                               April 24, 
                                                               1996.

         (7)  The Company's 1996 Stock Option Plan for         Exhibit B to the
              Non-Employee Directors.                          Company's Proxy
                                                               Statement for its
                                                               1996 Annual 
                                                               Meeting of
                                                               Stockholders held
                                                               on April 24, 
                                                               1996.

         (8)  The Company's informal incentive bonus plan.     Exhibit 10.9 to a
                                                               Registration
                                                               Statement on Form
                                                               S-2, Registration
                                                               No. 2-84880.

         (9)  Employment agreement dated December 13, 1989,    Exhibit 9-(14) to
              as amended and restated on February 13, 1992,    the Company's
              and re-executed on May 28, 1992, between the     Form 10-K for the
              Company and Robert J. Lepofsky.                  Year Ended
                                                               December 31,
                                                               1992.

         (10) The Company's Section 125 Plan.                  Exhibit 18 to
                                                               Form 8, Amendment
                                                               No. 1 to the
                                                               1985 Annual 
                                                               Report on Form
                                                               10-K.
 
         (11) The Company's Amended and Restated               Exhibit 10-(12)
              Employees' Pension Plan dated December 15,       to the Company's
              1994.                                            Form 10-K for the
                                                               Year Ended 
                                                               December 31,
                                                               1994.
 
 

                                     - 18 -
<PAGE>

                                    
                                     PART IV

Item  14.  Exhibits,  Financial  Statement  Schedules  and  Reports  on Form 8-K
(continued)

                                                              Page Number(s) or
                                                              Incorporation by
Description                                                   Reference to
-----------                                                   ------------------

         (12) The Company's Amended and Restated              Exhibit 10-(13) to
              Employee Personal Account Plan dated            the Company's Form
              December 15, 1994.                              10-K for the Year
                                                              Ended December 31,
                                                              1994.

         (13) The Company's Supplemental Key Executive        Exhibit 14-(14) to
              Retirement Plan effective February 13, 1992.    the Company's Form
                                                              10-K for the Year
                                                              Ended December 31,
                                                              1992.

         (14) Employment Agreement dated July 18, 1997,       Exhibit 10-(13) to
              between the Company and Robert E. Anastasi.     the Company's Form
                                                              10-K for the Year
                                                              Ended December 31,
                                                              1997.

         (15) Employment Agreement dated July 18, 1997,       Exhibit 10-(14) to
              between the Company and Michael El-Hillow.      the Company's Form
                                                              10-K for the Year
                                                              Ended December 31,
                                                              1997.

         (16) Employment Agreement dated August 18, 1997,     Exhibit 10-(15) to
              between the Company and Christopher Moody.      the Company's Form
                                                              10-K for the Year
                                                              Ended December 31,
                                                              1997.

         (17) Employment Agreement dated July 18, 1997,       Exhibit 10-(16) to
              between the Company and Richard J. Paynting.    the Company's Form
                                                              10-K for the Year
                                                              Ended December 31,
                                                              1997.
         (18) The Company's Amended and Restated
              Employee Savings Plan dated April 1, 1998.
 


                                     - 19 -
<PAGE>
                                    
                                     PART IV

Item  14.  Exhibits,  Financial  Statement  Schedules  and  Reports  on Form 8-K
(continued)
 
     21.   Subsidiaries of the Registrant

     23.   Consent of Independent Accountants

     27.1  Financial Data Schedule (EDGAR version only)

     27.2  Financial Data Schedule (EDGAR version only)

(b) The Company  did not file any  reports on Form 8-K during the quarter  ended
December 31, 1998.

(c) Exhibits  required by Item 601 of  Regulation  S-K are indexed  under (a)(3)
above.

(d) Separate  financial  statements of: (1)  subsidiaries  not  consolidated and
fifty percent or less owned persons; (2) affiliates whose securities are pledged
as collateral; and (3) other Schedules are not filed because they are either not
applicable or the items do not exceed the various disclosure levels.






























                                     - 20 -

<PAGE>
                                       
                                   SIGNATURES



        Pursuant to  the  requirements  of Section 13 or 15(d) 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, this
        19th day of March, 1999.


                                           HELIX TECHNOLOGY CORPORATION
                                                  (Registrant)



                                        /s/Robert J. Lepofsky
                                        ----------------------------------------
                                           Robert J. Lepofsky
                                           President and Chief Executive Officer

        Pursuant to  the  requirements  of  the Securities Exchange Act of 1934,
        this report has been signed below  by the following persons on behalf of
        the  registrant  on  this  19th  day  of  March, 1999, in the capacities
        indicated.

         Signatures                                Titles

(i)   Principal Executive Officer


      /s/Robert J. Lepofsky
      ---------------------
         Robert J. Lepofsky                President and Chief Executive Officer


(ii)  Principal Financial and 
      Accounting Officer


     /s/Michael El-Hillow
     --------------------
        Michael El-Hillow                  Senior Vice President and Chief
                                           Financial Officer


 








                                     - 21 -

<PAGE>
   

     (iii)  A Majority of the Board of Directors


 
            /s/ Arthur R. Buckland            Director
            -------------------------
                Arthur R. Buckland


 
            /s/ Matthew O. Diggs, Jr.         Director
            -------------------------
                Matthew O. Diggs, Jr.



            /s/ Frank Gabron                  Director
            -------------------------
                Frank Gabron


 
            /s/ Robert H. Hayes               Director
            -------------------------
                Robert H. Hayes



            /s/ Robert J. Lepofsky            Director
            -------------------------
                Robert J. Lepofsky



            /s/ Marvin G. Schorr              Director and Chairman of the Board
            -------------------------
                Marvin G. Schorr



            /s/ Wickham Skinner               Director
            ------------------------- 
                Wickham Skinner



            /s/ Mark S. Wrighton              Director
            -------------------------
                Mark S. Wrighton








                                     - 22 -

                    
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS




To The Board of Directors and Stockholders
of Helix Technology Corporation:

     In our opinion,  the accompanying  consolidated  balance sheets and related
consolidated  statements  of  operations,  stockholders'  equity,  comprehensive
income and cash flows present fairly,  in all material  respects,  the financial
position of Helix  Technology  Corporation at December 31, 1997 and 1998 and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31,  1998,  in  conformity  with  generally  accepted
accounting principles.  These financial statements are the responsibility of the
Company's  management;  our  responsibility  is to  express  an opinion on these
financial  statements  based on our  audits.  We  conducted  our audits of these
statements  in accordance  with  generally  accepted  auditing  standards  which
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for the opinion expressed above.



/s/ PricewaterhouseCoopers LLP
------------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 29, 1999





















                                     - 23 -

<PAGE>
                        
<TABLE>

                          HELIX TECHNOLOGY CORPORATION
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                           December 31,
(in thousands except share data)                          Notes          1998         1997
---------------------------------------------------------------------------------------------
ASSETS
Current:
<S>                                                         <C>         <C>          <C>    
  Cash and cash equivalents                                 A           $ 8,843      $34,717
  Investments                                               A            18,152        3,675
  Receivables - net of allowances of $228 in
   1998 and $240 in 1997                                                  9,783       18,185
  Inventories                                               A            14,811       15,371
  Deferred income taxes                                     A&D           5,157        4,234
  Other current assets                                                    1,106        1,119
---------------------------------------------------------------------------------------------
Total Current Assets                                                     57,852       77,301
---------------------------------------------------------------------------------------------

Property, plant and equipment at cost                       A            36,691       34,252
Less:  accumulated depreciation                                         (25,990)     (22,109)
---------------------------------------------------------------------------------------------
Net property, plant and equipment                                        10,701       12,143
Other assets                                                A&F           7,099        6,775
---------------------------------------------------------------------------------------------
TOTAL ASSETS                                                            $75,652      $96,219
=============================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
  Accounts payable                                                      $ 3,752      $ 5,036
  Payroll and compensation                                                2,884        4,298
  Retirement costs                                          H             3,588        3,501
  Income taxes                                              A&D             507        3,022
  Other accrued liabilities                                 I             1,553          667
---------------------------------------------------------------------------------------------
Total Current Liabilities                                                12,284       16,524
---------------------------------------------------------------------------------------------

Commitments                                                 C                 -            -
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:  22,319,131 in 1998
  and 22,213,131 in 1997                                    E            22,319       22,213
Capital in excess of par value                                            7,936        3,684
Deferred compensation                                       I                 -         (953)
Treasury stock, $1 par value 34,000 shares                                 (438)           -
Accumulated other comprehensive income (loss)                              (359)          71
Retained earnings                                                        33,910       54,680
---------------------------------------------------------------------------------------------
Total Stockholders' Equity                                               63,368       79,695
---------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $75,652      $96,219
=============================================================================================

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

</TABLE>

                                        - 24 -
<PAGE>
<TABLE>

                              

                                HELIX TECHNOLOGY CORPORATION
                           CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>

                                                      For the years ended December 31,
(in thousands except per share data)              Notes        1998         1997         1996
-----------------------------------------------------------------------------------------------

<S>                                                <C>       <C>         <C>          <C>     
Net sales                                                    $ 95,345    $157,076     $151,665
-----------------------------------------------------------------------------------------------

Costs and expenses:
Cost of sales                                                  57,373      81,325       78,892
Research and development                            A          10,106      11,540       10,213
Selling, general and administrative                 E          26,581      30,891       27,773
Merger, restructuring and special charges           I           6,046           -            -
-----------------------------------------------------------------------------------------------
                                                              100,106     123,756      116,878
-----------------------------------------------------------------------------------------------
Operating income (loss)                                        (4,761)     33,320       34,787

Joint venture income                                F             957       1,744        1,480
Interest and other income                                       1,234       1,754        1,457
-----------------------------------------------------------------------------------------------
Income (loss) before taxes                                     (2,570)     36,818       37,724
Income tax benefit (provision)                      A&D           650     (11,274)     (12,598)
-----------------------------------------------------------------------------------------------
Net income (loss)                                            $ (1,920)   $ 25,544     $ 25,126
===============================================================================================
Net income (loss) per share:
  Basic                                             A&E      $  (0.09)   $   1.15     $   1.15
  Diluted                                           A&E      $  (0.09)   $   1.14     $   1.14
===============================================================================================
Number of shares used in per share calculations:
  Basic                                             A&E        22,262      22,151       21,788
  Diluted                                           A&E        22,262      22,353       22,096
===============================================================================================


Pro Forma Results (unaudited)
Income (loss) before taxes                                   $ (2,570)   $ 36,818     $ 37,724
Income tax benefit (provision)                                    824     (12,767)     (13,675)
-----------------------------------------------------------------------------------------------
Pro forma net income (loss)                                  $ (1,746)   $ 24,051     $ 24,049
===============================================================================================
Pro forma net income (loss) per share:
   Basic                                                     $  (0.08)   $   1.09     $   1.10
   Diluted                                                   $  (0.08)   $   1.08     $   1.09
===============================================================================================

The accompanying notes are an integral part of these financial statements.
</TABLE>


                                           - 25 -

<PAGE>
<TABLE>

        

                          HELIX TECHNOLOGY CORPORATION
                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>

                                         Common Stock                              Accumulated
                                      -------------------                             Other
                                               Capital in                         Comprehensive
                                       Par       Excess     Deferred     Treasury    Income/    Retained
(in thousands)                        Value      of Par    Compensation    Stock      (Loss)    Earnings     Total
--------------------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>         <C>          
Balance, December 31, 1995 ......   $ 21,765    $  1,937    $   (508)   $   --      $  1,307    $ 35,787    $ 60,288
Shares issued for stock options .        419       1,417        --          --          --          --         1,836
Income tax benefit from
  exercise of stock options .....       --         1,739        --          --          --          --         1,739
Restricted stock (Note I) .......         99         749        (377)       --          --          --           471
Shares tendered for exercise
  of stock options ..............       (168)     (2,843)       --          --          --          --        (3,011)
Retirement of treasury stock ....        (80)       (895)       --          --          --          --          (975)
Other comprehensive loss ........       --          --          --          --          (474)       --          (474)
Net income ......................       --          --          --          --          --        25,126      25,126
Cash dividends ..................       --          --          --          --          --       (15,517)    (15,517)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 ......     22,035       2,104        (885)       --           833      45,396      69,483
---------------------------------------------------------------------------------------------------------------------
Shares issued for stock options .        157       1,625        --          --          --          --         1,782
Income tax benefit from
  exercise of stock options .....       --           448        --          --          --          --           448
Restricted stock (Note I) .......         73         494         (68)       --          --          --           499
Shares tendered for exercise
  of stock options ..............        (52)       (987)       --          --          --          --        (1,039)
Other comprehensive loss ........       --          --          --          --          (762)       --          (762)
Net income ......................       --          --          --          --          --        25,544      25,544
Cash dividends ..................       --          --          --          --          --       (16,260)    (16,260)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 ......     22,213       3,684        (953)       --            71      54,680      79,695
---------------------------------------------------------------------------------------------------------------------
Shares issued for stock options .        106       1,785        --          --          --          --         1,891
Income tax effect from exercise
  of stock options ..............       --          (224)       --          --          --          --          (224)
Restricted stock and
  acquisition adjustment (Note I)       --         2,691         953        --          --        (2,783)        861
Shares tendered for exercise of
  stock options .................       --          --          --          (438)       --          --          (438)
Other comprehensive loss ........       --          --          --          --          (430)       --          (430)
Net loss ........................       --          --          --          --          --        (1,920)     (1,920)
Cash dividends ..................       --          --          --          --          --       (16,067)    (16,067)
---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 ......   $ 22,319    $  7,936    $   --      $   (438)   $   (359)   $ 33,910    $ 63,368
=====================================================================================================================

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

</TABLE>





                                     - 26 -

<PAGE>
<TABLE>


                                HELIX TECHNOLOGY CORPORATION
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                 For the years ended December 31,
(in thousands)                                                     1998        1997        1996
-------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S>                                                             <C>         <C>         <C>     
  Net income (loss) .........................................   $ (1,920)   $ 25,544    $ 25,126
  Adjustments to reconcile net income (loss) to net
   cash provided (used) by operating activities:
     Depreciation and amortization ..........................      3,999       3,713       3,632
     Deferred income taxes ..................................       (923)       (820)       (763)
     Restructuring charge ...................................        667        --          --
     Undistributed earnings of joint venture, other .........       (769)     (1,561)       (984)
     Amortization of deferred compensation ..................        861         499         471
     Performance-based stock compensation ...................        959       1,300         750
     Net change in other operating assets and liabilities (1)      4,535      (1,216)      2,325
-------------------------------------------------------------------------------------------------
  Net cash provided by operating activities .................      7,409      27,459      30,557
-------------------------------------------------------------------------------------------------
Cash flows from investing activities:
  Capital expenditures ......................................     (2,557)     (5,248)     (3,819)
  Purchase of investments ...................................    (53,047)     (4,444)     (4,277)
  Sale of investments .......................................     38,585       3,470       3,704
-------------------------------------------------------------------------------------------------
  Net cash used by investing activities .....................    (17,019)     (6,222)     (4,392)
-------------------------------------------------------------------------------------------------
Cash flows from financing activities:
  Shares tendered for exercise of stock options .............       (438)     (1,039)     (3,011)
  Net cash provided by employee stock plans .................        241         543       1,061
  Purchase of treasury stock ................................       --          --          (975)
  Cash dividends paid .......................................    (16,067)    (16,260)    (15,517)
-------------------------------------------------------------------------------------------------
  Net cash used by financing activities .....................    (16,264)    (16,756)    (18,442)
-------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents ............    (25,874)      4,481       7,723
Cash and cash equivalents, January 1 ........................     34,717      30,236      22,513
-------------------------------------------------------------------------------------------------
Cash and cash equivalents, December 31 ......................   $  8,843    $ 34,717    $ 30,236
=================================================================================================

(1)  Change in other operating assets and liabilities:
      (Increase)/decrease in accounts receivable ............   $  8,402    $ (4,871)   $  7,114
      (Increase)/decrease in inventories ....................        560         484        (948)
      (Increase)/decrease in other current assets ...........         12        (218)       (293)
      Increase/(decrease) in accounts payable ...............     (1,284)         67      (1,950)
      Increase/(decrease) in other accrued expenses .........     (3,155)      3,322      (1,598)
-------------------------------------------------------------------------------------------------
     Net change in other operating assets and liabilities ...   $  4,535    $ (1,216)   $  2,325
=================================================================================================

Income taxes paid ...........................................   $  3,528    $ 10,131    $ 15,482
=================================================================================================

Supplemental disclosure of non-cash activity in 1998, 1997 and 1996, $1,650,000, $1,240,000
and $775,000, respectively, was reclassed from accrued executive compensation to equity in
connection with issuance of stock options.

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

</TABLE>

                                     - 27 -
<PAGE>
<TABLE>


                          HELIX TECHNOLOGY CORPORATION
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


<CAPTION>

                                                      For the years ended December 31,
(in thousands)                                                1998         1997
--------------------------------------------------------------------------------------
<S>                                                         <C>         <C>     
Net income (loss) .......................................   $ (1,920)   $ 25,544
--------------------------------------------------------------------------------------

Other comprehensive loss, before tax
   Foreign currency translation adjustment ..............       (662)     (1,047)
   Unrealized gain on available-for-sale investment .....         15        --
--------------------------------------------------------------------------------------
                                                                (647)     (1,047)
Income tax related to items of other comprehensive income        217         285
--------------------------------------------------------------------------------------
Other comprehensive loss, net of tax ....................       (430)       (762)
--------------------------------------------------------------------------------------
Comprehensive income (loss) .............................   $ (2,350)   $ 24,782
======================================================================================

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

</TABLE>





















                                     - 28 -
<PAGE>
                             

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Summary of Significant Accounting Policies

     Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and  liabilities at the
date of the  financial  statements  and the  reported  amounts of  revenues  and
expenses  during the reporting  period.  Actual  results could differ from those
estimates. Certain reclassifications have been made to prior years' consolidated
financial statements to conform with the current presentation.

     Principles of Consolidation

     The consolidated  financial  statements include the accounts of the Company
and  its  wholly  owned  subsidiaries  after  elimination  of  all  intercompany
transactions. The investment in and operating results of the Company's 50%-owned
joint venture are included on the basis of the equity method of accounting.

     Business Combination

     In May 1998, the Company acquired  Granville-Phillips  Company ("GPC"). The
acquisition  was  accounted  for as a  pooling  of  interests  under  Accounting
Principles  Board  Opinion  No. 16  "Business  Combinations".  All prior  period
consolidated  financial  statements  have been restated to include the financial
position, results of operations, stockholders equity and cash flows of GPC.

     Foreign Currency Translation

     Assets  and  liabilities  of  operations  outside  the  United  States  are
translated into U.S.  dollars using current  exchange rates.  Income and expense
accounts are  translated  at the average  rates in effect  during the year.  The
effects  of  foreign   currency   translation   adjustments   are   included  in
comprehensive  income as a component of  stockholders'  equity.  The  cumulative
translation adjustment for the Company's 50%-owned joint venture is reported net
of income  taxes.  Transaction  gains/losses  were not  material.  The effect of
foreign currency exchange rates on cash and cash equivalents was not material.

     Comprehensive Income

     In January 1998, the Company adopted Financial  Accounting Standard No. 130
"Reporting  Comprehensive  Income," which requires unrealized gains or losses on
the Company's  investments and foreign  currency  translation  adjustments to be
included in other comprehensive income.





                                     - 29 -

<PAGE>

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Summary of Significant Accounting Policies  (continued)

     Cash and Cash Equivalents

     Cash and cash equivalents  include demand  deposits,  money market accounts
and other highly liquid investments with original  maturities of three months or
less.

 
     Investments

     The Company's investments are classified as available-for-sale  securities,
and the  difference in the cost and fair value of these  investments is included
in comprehensive income. The Company's investments consist of the following:


                                                    December 31,
                                          1998                    1997
                                  -------------------      ------------------
  (in thousands)                  Cost     Fair Value       Cost   Fair Value
-------------------------------------------------------------------------------

  Money market funds              $ 2,336    $ 2,336            -         -
  Municipal and tax-free bonds     15,516     15,531            -         -
  Treasury bills                      285        285       $3,675    $3,675
  -----------------------------------------------------------------------------
                                  $18,137    $18,152       $3,675    $3,675
  =============================================================================

     Financial Instruments

     Financial  instruments that potentially  subject the Company to significant
concentrations of credit risk consist  principally of cash and cash equivalents,
short-term  investments  and trade accounts  receivable.  The Company invests in
investment-grade  securities.  The Company's  customers are  concentrated in one
industry segment, the semiconductor manufacturing industry, and, historically, a
significant  portion of the  Company's  sales  have been to a limited  number of
customers within this industry.  The Company performs ongoing credit evaluations
of its customers'  financial  condition and may require deposits on large orders
but  does  not  require   collateral  or  other  security  to  support  customer
receivables.



                                     - 30 -
<PAGE>

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Summary of Significant Accounting Policies  (continued)

     Inventories
                                                    December 31,
     (in thousands)                              1998         1997
     --------------------------------------------------------------------
     Finished goods                             $ 3,067      $ 4,355
     Work in process                              7,597        7,367
     Materials and parts                          4,147        3,649
     --------------------------------------------------------------------
                                                $14,811      $15,371
     ====================================================================

     Inventories are stated at the lower of cost or market on a first-in, 
     first-out basis.

     Property, Plant and Equipment
                                                    December 31,
     (in thousands)                              1998         1997
     --------------------------------------------------------------------
     Land                                       $    20      $    20
     Leasehold improvements                       5,454        4,710
     Machinery and equipment                     31,217       29,522
     --------------------------------------------------------------------
                                                $36,691      $34,252
     ====================================================================

     Depreciation  is provided on the  straight-line  method over the  estimated
useful lives of the assets. Leasehold improvements are amortized over the lesser
of their useful life or the remaining life of the lease.  Estimated useful lives
of machinery and equipment range from 3 to 15 years.

     Maintenance and repairs are charged to expense as incurred, and betterments
are capitalized. The cost of assets sold or retired and related depreciation are
removed from the accounts at the time of sale and any resulting  gain or loss is
reflected in income.

     Revenue Recognition

     The Company records revenue on its products when units are shipped and when
services are performed.

     Research and Development

     Research and development costs are expensed as incurred.


                                           - 31 -
<PAGE>

                             

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Summary of Significant Accounting Policies  (continued)

     Income Taxes

     Deferred income taxes result from temporary  differences in the recognition
of revenues and  expenses  between  financial  statements  and tax returns.  Tax
credits are recognized  when realized for tax purposes using the  "flow-through"
method of  accounting.  The Company has not  provided  for federal  income taxes
applicable to  undistributed  earnings of its foreign  subsidiaries  since these
earnings are indefinitely reinvested.

     Net Income Per Share

     In 1997,  the  Company  adopted  Financial  Accounting  Standards  No.  128
"Earnings  per  Share"  which  specifies  the   computation,   presentation  and
disclosure of net income per share.  Basic net income (loss) per common share is
based on the weighted  average  number of common shares  outstanding  during the
year. Diluted net income (loss) per common share reflects the potential dilution
that could occur if outstanding  stock options were exercised.  All prior period
net income per share figures have been restated.

     The  following  table sets forth the  computation  of basic and diluted net
income (loss) per common share:
 
                                               For the years ended December 31,
     (in thousands except per share data)        1998    1997       1996
     --------------------------------------------------------------------------
     Net income (loss)                        $(1,920)   $25,544    $25,126
     ==========================================================================

     Basic Shares                              22,262     22,151     21,788
     Add:  Common equivalent shares (1)             -        202        308
     --------------------------------------------------------------------------
     Diluted shares                            22,262     22,353     22,096

     Basic net income (loss) per share        $ (0.09)   $  1.15    $  1.15
     ==========================================================================

     Diluted net income (loss) per share      $ (0.09)   $  1.14    $  1.14
     ==========================================================================

     (1) Common equivalent shares  representing  shares issuable upon conversion
of stock options  (using the treasury  stock method).  Options  outstanding  not
included in the  computation  of diluted shares were 491,000 in 1998 because the
Company was in a net loss  position,  and the  inclusion of such shares would be
anti-dilutive.  For 1997 and 1996,  respectively,  30,000  and  120,000  options
outstanding were not included in the  computation,  because the option price was
greater than the average market price of the common shares.

 

                                     - 32 -

<PAGE>
                            

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A.   Summary of Significant Accounting Policies  (continued)

     New Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards  Board issued  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities."  The  adoption of this  Standard in 2000 is not  expected to have a
material impact on the Company's financial statements.

B.   Bank Credit Arrangements

     The  Company's  informal  bank money  market  lines of credit  amounted  to
$12,000,000 at December 31, 1998 and 1997.

C.   Lease Obligations and Commitments

     The  Company  leases  certain  facilities  and  equipment  under  long-term
operating  leases.  The  Company  has a  noncancelable  operating  lease for its
corporate headquarters and manufacturing operations,  which expires in 2006. The
lease includes  scheduled base rent increases  through the term of the lease and
renewal options for up to fifteen additional years.

     Future minimum lease payments under the noncancelable operating leases are:

     (in thousands)                  Operating Leases
     ------------------------------------------------
     1999                                 $3,534
     2000                                  2,870
     2001                                  2,165
     2002                                  2,195
     2003                                  2,189
     Later years                           6,119
     ------------------------------------------------
     Total                                $19,072
     ================================================

     Total  rental  expense  under  operating  leases  was  $3,526,000  in 1998,
$3,289,000 in 1997, and $3,159,000 in 1996.

     The Company enters into short-term  foreign currency forward contracts with
its  primary  bank to  minimize  the effect of foreign  currency  exchange  rate
fluctuations on certain intercompany transactions with its wholly owned European
and Japanese subsidiaries. Net realized and unrealized gains and losses on these
transactions  are not material and are recorded in the statements of operations.
The notional  amounts of the  Company's  outstanding  foreign  currency  forward
contracts  at  December  31,  1998 and 1997,  were  $2,153,000  and  $2,224,000,
respectively.



                                     - 33 -

<PAGE>

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

D.   Income Taxes

     The  components  of income  (loss)  before  income  taxes  and the  related
provision for (benefit from) income taxes are presented below:

                                            For the years ended December 31,
     (in thousands)                        1998         1997       1996
     ----------------------------------------------------------------------- 
     Income (loss) before income taxes:
      Domestic                             $(2,572)     $36,106    $37,152
      Foreign                                    2          712        572
     -----------------------------------------------------------------------
                                           $(2,570)     $36,818    $37,724
     =======================================================================
 
     Provision for (benefit from) income
     taxes:
      Current:
         Federal                           $   176      $10,096    $10,593
         Foreign                                18          250        285
         State                                  79        1,729      2,482
     -----------------------------------------------------------------------
                                               273       12,075     13,360
     
      Deferred:
         Federal                              (611)        (656)      (624)
         Foreign                                 -            -          -
         State                                (312)        (145)      (138)
     -----------------------------------------------------------------------
                                              (923)        (801)      (762)
     -----------------------------------------------------------------------
     Total                                 $  (650)     $11,274     $12,598
     =======================================================================


     The Company's  deferred tax assets and  (liabilities)  are comprised of the
following:

                                                              December 31,
     (in thousands)                                        1998       1997
     -----------------------------------------------------------------------
     Deferred tax assets:
     Inventory valuation                                  $1,411     $1,312
     Compensation and benefit plans                        2,208      2,483
     Leases                                                  223        262
     Depreciation                                            305          -
     Net operating loss and tax credit carryforwards         656          -
     Other                                                   434        230
     ------------------------------------------------------------------------
       Total deferred tax assets                          $5,237     $4,287
     Deferred tax liabilities:
     Depreciation                                         $    -     $  (53)
     Other                                                   (80)         -
     ------------------------------------------------------------------------
       Total deferred tax liabilities                     $  (80)    $  (53)
     ------------------------------------------------------------------------
       Net deferred tax assets                            $5,157     $4,234
     ========================================================================

     Deferred income taxes on undistributed earnings of the foreign subsidiaries
are not  material.  The Company  believes  that its deferred tax assets are more
likely than not realizable; therefore, no valuation allowance is required.

                                     - 34 -
                               
<PAGE>

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

D.   Income Taxes (continued)

     The table below  reconciles the expected U.S.  federal income tax provision
(benefit) to the recorded  income tax provision  (benefit) in the  statements of
operations:

                                                             December 31,
     (in thousands)                                  1998        1997     1996
     ---------------------------------------------------------------------------
     Federal tax computed at statutory rate
       of 35%                                       $(899)    $12,886   $13,203
     State income taxes, net of federal income
       tax benefit                                   (151)      1,063     1,563
     Non-taxable S-Corporation (income) loss          165      (1,514)   (1,148)
     Foreign sales corporation tax benefit              -        (907)     (923)
     Earnings not subject to U.S. income taxes       (191)       (414)     (333)
     R&D and foreign tax credits                     (357)       (516)     (177)
     Non-deductible acquisition costs                 620           -         -
     Other, net                                       163         676       413
     ---------------------------------------------------------------------------
     Income tax provision (benefit)                 $(650)    $11,274   $12,598
     ===========================================================================

     Prior to the acquisition on May 7, 1998, Granville-Phillips Company ("GPC")
had elected to be treated as an  S-Corporation  for federal income tax reporting
purposes.  Under this election, the individual stockholders of GPC are deemed to
have received a pro rata  distribution  of taxable income of GPC (whether or not
an actual  distribution  was made),  which is included in their taxable  income.
Accordingly,  GPC did not provide for federal income taxes.  Unaudited pro forma
net income  (loss) per share  reflects  unaudited  pro forma  income tax benefit
(provision)  of GPC as if GPC was combined and subject to the effective  federal
and state statutory rates of approximately 38% throughout the periods presented.
GPC's  S-Corporation  tax  reporting  status was  terminated  on the date of the
acquisition and, therefore, the undistributed earnings of $2.8 million as of the
date of acquisition have been reclassified to additional paid-in capital.

     For U.S. federal income tax purposes,  the Company has a net operating loss
carryforward of approximately  $1.0 million.  This  carryforward  will expire in
2018.

E.   Capital Stock

     On  October  16,  1997,  the  Company's  Board of  Directors  authorized  a
two-for-one  common  stock  split that was  effected in the form of a 100% stock
dividend.   Stock  certificates  were  distributed  on  November  13,  1997,  to
stockholders  of record on October 30, 1997.  All  references  in the  financial
statements and notes to number of shares, per share amounts and market prices of
the  Company's  common  stock have been  retroactively  restated  to reflect the
increased number of common shares outstanding.

     Options for the purchase of shares of the Company's  common stock have been
granted to officers,  directors  and key employees  under various  incentive and
nonqualified stock option agreements. The terms of these agreements provide that
the options are exercisable over a number of years from the date of grant at not
less than the fair market value at the date of grant.
 
                                     - 35 -

<PAGE>                              

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

E.   Capital Stock  (continued)

     Options expire at various dates through the year 2008. At December 31, 1998
and 1997,  respectively,  1,207,774  and  1,313,774  shares of common stock were
reserved for stock options. At December 31, 1998 and 1997, respectively,  97,024
and 75,774  nonqualified  stock options were  exercisable.  In 1989, the Company
entered into an agreement with its President  under which options to purchase up
to 800,000  shares of the  Company's  common stock were  granted,  at a price of
$1.69 per share, exercisable over a ten-year period subject to the attainment of
certain financial  performance  targets.  At December 31, 1998,  options for the
purchase  of 640,000  shares had become  exercisable.  In  connection  with this
agreement, compensation expense of $959,000, $1,300,000 and $750,000 was charged
in 1998, 1997 and 1996, respectively.

     The following  table  summarizes  option activity for the years ended 1998,
1997 and 1996:

                                      Number of           Weighted Average
     Options Outstanding            Common Shares          Exercise Price
     ---------------------------------------------------------------------
     December 31, 1995                895,400                  $ 2.71

     Options granted                  140,000                  $16.40
     Options exercised               (420,400)                 $ 2.52
                                     ---------
     December 31, 1996                615,000                  $ 5.95

     Options granted                  121,000                  $20.90
     Options exercised               (157,226)                 $ 3.45
     Options cancelled                (82,000)                 $14.66
                                     ---------
     December 31, 1997                496,774                  $ 8.95

     Options granted                  180,000                  $22.33
     Options exercised               (106,000)                 $ 2.27
                                     ---------
     December 31, 1998                570,774                  $14.41

     The following table summarizes information concerning currently outstanding
and exercisable options:

<TABLE>
<CAPTION>

                                Options Outstanding                        Options Exercisable
                  -------------------------------------------------   -----------------------------
     Range of          Number        Weighted Average     Weighted          Number        Weighted
     Exercise        Outstanding        Remaining          Average        Exercisable      Average
      Prices         at 12/31/98    Contractual Life    Exercise Price    at 12/31/98   Exercise Price
   ---------------------------------------------------------------------------------------------------
   <S>                 <C>             <C>                  <C>             <C>            <C>   
   $ 1.69 - $ 9.13     199,774         2.17 years           $ 2.37          29,774         $ 3.78
   $14.31 - $18.44     161,000         6.47 years           $17.06          57,750         $16.74
   $23.11 - $27.03     210,000         8.84 years           $23.83           9,500         $26.91

</TABLE>



                                     - 36 -
<PAGE>
                               
                          HELIX TECHNOLOGY CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

E.   Capital Stock  (continued)

     The Company adopted the disclosure only option under Statement of Financial
Accounting  Standards No. 123,  "Accounting for Stock-Based  Compensation" (SFAS
123) as of December 31, 1996. If the accounting  provisions of SFAS 123 had been
adopted, the effect on net income (loss) and basic and diluted net income (loss)
per share would have been as follows:

     (in thousands except per share data)       1998        1997        1996
     ------------------------------------------------------------------------
     As Reported
     Net income (loss)                        $(1,920)    $25,544     $25,126
     Basic net income (loss) per share        $ (0.09)    $  1.15     $  1.15
     Diluted net income (loss) per share      $ (0.09)    $  1.14     $  1.14

     Pro Forma
     Net income (loss)                        $(2,438)    $25,371     $25,015
     Basic net income (loss) per share        $ (0.11)    $  1.15     $  1.15
     Diluted net income (loss) per share      $ (0.11)    $  1.14     $  1.14

     The weighted  average fair value of options  granted during 1998,  1997 and
1996 was $8.44,  $8.06 and $6.16,  respectively.  The fair value of each  option
grant is estimated on the date of grant using the  Black-Scholes  option-pricing
model with the following weighted-average assumptions:

                                                1998        1997        1996
     -----------------------------------------------------------------------
     Dividend yield                             4.2%        4.2%        4.2%
     Expected stock price volatility             50%         50%         50%
     Risk-free interest rate                   5.49%       6.34%       6.08%
     Expected holding period (years)            6.4         6.4         6.3



                                     - 37 -

<PAGE>
  
                          HELIX TECHNOLOGY CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F.   Other Assets

     The Company has a 50/50 joint venture company, Ulvac Cryogenics, Inc., with
an unrelated Japanese manufacturer to produce cryogenic vacuum pumps in Japan.

     Condensed results of operations for the joint venture for each of the three
fiscal years ended September 30 are as follows:

     (in thousands)                             1998        1997        1996
     ------------------------------------------------------------------------
     Net sales                                $19,511     $27,638     $25,751
     ========================================================================
     Gross profit                             $ 5,280     $ 8,488     $ 7,415
     ========================================================================
     Net income                               $ 1,092     $ 2,364     $ 1,901
     ========================================================================
     Fee income, including royalty income
      and equity income                       $   957     $ 1,744     $ 1,480
     ========================================================================

     Condensed balance sheet information as of September 30, is as follows:

     (in thousands)                                 1998           1997
     ------------------------------------------------------------------------
     Current assets                                $15,314        $20,724
     Noncurrent assets                               2,906          3,399
     ------------------------------------------------------------------------
     Total assets                                  $18,220        $24,123
     ========================================================================
     Current liabilities                           $ 4,572        $ 9,710
     Long-term liabilities                             829            915
     Stockholders' equity                           12,819         13,498
     ------------------------------------------------------------------------
     Total liabilities and stockholders' equity    $18,220        $24,123
     ========================================================================

     The  Company's  net  investment  in  the  joint  venture  of  approximately
$6,500,000  and  $6,552,000  at  December  31, 1998 and 1997,  respectively,  is
reported in other assets.  The Company's net investment at December 31, 1998 and
1997, reflects a cumulative  translation gain (loss) of ($168,000) and $366,000,
respectively  (net of income tax benefit of $90,000 and  provision  of $197,000,
respectively).  This  currency  translation  gain or loss,  which is included in
stockholders'  equity,  resulted from translating the balance sheet of the joint
venture into U.S. dollars.

G.   Segment Information

     Line of Business and Foreign Operations

     The Company adopted  Statement of Financial  Accounting  Standards No. 131,
"Disclosure  about Segments of an Enterprise and Related  Information" for 1998.
The Company operates in one line of business; the development, manufacture, sale
and support of cryogenic and vacuum equipment.




                                     - 38 -
<PAGE>

                              

                          HELIX TECHNOLOGY CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

G.   Segment Information  (continued)

     The consolidated  financial statements include the accounts of wholly owned
international subsidiaries which operate customer support facilities to sell and
service  products  manufactured in the United States. A summary of United States
and International operations follows for the years ended December 31:

                                                       Corporate
                                                        Expenses
                               United                  and Assets/
     (in thousands)            States  International  Eliminations  Consolidated
     ---------------------------------------------------------------------------
     1998
     Net sales                 $ 90,278     $13,598     $(8,531)     $ 95,345
     Operating income (loss)      3,843          85      (8,689)       (4,761)
     Identifiable assets         42,530       8,026      25,096        75,652



     1997
     Net sales                 $152,448     $13,993     $(9,365)     $157,076
     Operating income            37,733         751      (5,164)       33,320
     Identifiable assets         52,231       7,457      36,531        96,219


     1996
     Net sales                 $147,175     $13,093     $(8,603)     $151,665
     Operating income            38,324         561      (4,098)       34,787
     Identifiable assets         44,706       7,183      31,116        83,005

     Corporate expenses consist of certain general and administrative  expenses,
including  merger,  restructuring  and  special  charges in 1998,  which are not
allocable to geographic operations.  Corporate assets consist primarily of cash,
cash equivalents and investments.  Intercompany  transactions are at prices that
are comparable to third-party sales.

     Export Sales and Significant Customers

     The Company's export sales,  principally to customers in the Far East, were
$6,322,000 in 1998, $13,105,000 in 1997 and $11,524,000 in 1996.

     The Company's  largest customer  represented 20%, 30%, and 28% of net sales
for 1998, 1997 and 1996, respectively.


                                     - 39 -
<PAGE>


                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

H.    Employee Benefit Plans

     The Company's  retirement and savings plans cover  substantially all of the
Company's  employees  who have one year of service.  A  noncontributory  defined
benefit pension plan and a defined  contribution  plan function  together as the
Company's retirement program.

     The Company's  funding  policy is to  contribute  not less than the minimum
required  amount in  accordance  with the Internal  Revenue Code and ERISA.  The
Company adopted Statement of Financial Accounting Standards No. 132, "Employee's
Disclosure  about  Pensions and Other  Retirement  Benefits,"  during 1998.  The
following tables set forth the funded status,  projected benefit  obligation and
fair value of assets of the defined benefit pension plan.

     Reconciliation of Funded Status
 
                                                               December 31,
     (in thousands)                                         1998         1997
     ---------------------------------------------------------------------------
     Funded status                                        $ 1,402      $ 1,821
     Unrecognized prior service cost                           40           52
     Unrecognized net transition asset                       (184)        (223)
     Unrecognized net actuarial gain                       (4,018)      (4,135)
     ---------------------------------------------------------------------------
     Accrued pension cost                                 $(2,760)     $(2,485)
     ===========================================================================

     Reconciliation of Projected Benefit Obligation

     (in thousands)                                        1998          1997
     ---------------------------------------------------------------------------
     Beginning of year benefit obligation (January 1)     $ 6,369      $ 5,964
       Service cost                                           981          894
       Interest cost                                          508          481
       Actuarial loss                                         963           99
       Benefits paid                                       (1,061)      (1,069)
       Curtailment gain (1)                                  (489)           -
     ---------------------------------------------------------------------------
     End of year benefit obligation (December 31)         $ 7,271      $ 6,369
     ===========================================================================
     Reconciliation of Fair Value of Assets

     (in thousands)                                        1998         1997
     ---------------------------------------------------------------------------
     Beginning of year, fair value of assets (January 1)  $ 8,190      $ 7,553
       Actual return on plan assets                         1,544        1,706
       Benefits paid                                       (1,061)      (1,069)
     ---------------------------------------------------------------------------
     End of year, fair value of assets (December 31)      $ 8,673      $ 8,190
     ===========================================================================


                                     - 40 -

<PAGE>

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

H.   Employee Benefit Plans  (continued)

     The Company's net pension cost included the following components:

     (in thousands)                           1998          1997         1996
     ---------------------------------------------------------------------------
     Service cost                           $  981       $  894        $  840
     Interest cost                             508          481           443
     Expected return on assets                (563)        (537)         (505)
     Net amortization of:
       Prior service cost                        8            8             8
       Net actuarial gain                     (131)        (131)          (38)
       Transition obligation                   (39)         (39)          (39)
     Curtailment gain(1)                      (489)           -             -
     -------------------------------------------------------------------------
     Net periodic pension cost              $  275       $  676        $  709
     =========================================================================
 
     (1) The  curtailment  gain relates to certain  participants  in the pension
plan who were  terminated  from  employment  in  connection  with the  Company's
restructuring plan. (Note I).

     Key  assumptions  used in computing  year-end  obligations  for the defined
benefit plan were:

                                                  1998        1997        1996
     -------------------------------------------------------------------------

     Discount rate for obligations               6.75%        7.0%        7.5%
     Rate of compensation increase                5.0%        5.0%        5.5%
     Long-term rate of return on assets           9.0%        9.0%        9.0%
 
     Defined benefit plan assets include marketable equity securities, corporate
and government debt securities and cash.

     The Company has Employee  Savings Plans,  qualified  under Section  401(k),
that are designed to supplement  retirement  income.  The Company  contributes a
percentage of the  participants'  contributions  up to a defined maximum amount.
The contributions expense, net of forfeitures, was $826,000 in 1998, $812,000 in
1997 and $761,000 in 1996.

     The Company  has a  Supplemental  Key  Executive  Retirement  Plan which is
designed to  supplement  benefits  paid to  participants  under  Company-funded,
tax-qualified retirement plans. The Company recorded additional retirement costs
of $170,000 in 1998,  $69,000 in 1997 and  $140,000 in 1996 in  connection  with
this Plan.



                                     - 41 -
<PAGE>

                          HELIX TECHNOLOGY CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

I.   Merger, Restructuring and Special Charges

In the second quarter of 1998, the Company acquired  Granville-Phillips  Company
("GPC") in a transaction  accounted for as a pooling of interests.  GPC operates
in the same line of business as the Company; the development,  manufacture, sale
and support of vacuum  equipment.  The Company issued 2,382,925 shares of common
stock in exchange for all outstanding common stock of GPC at May 7, 1998. Direct
acquisition costs,  primarily  compensation expense relating to shares issued to
certain GPC employees as part of a restricted stock plan, and professional  fees
amounted to $3.5 million and were charged against the results of operations.  At
the time of the acquisition,  GPC common shares included in the restricted stock
plan were exchanged for the equivalent value of the Company's common shares. GPC
was an S-Corporation  for tax purposes prior to the  acquisition.  In accordance
with SAB  topic  4B,  the  amount  of  undistributed  earnings  of $2.8  million
generated  during  the  periods  that  GPC was  taxed  as an  S-Corporation  was
reclassified  from  retained  earnings  to capital in excess of par value at the
time of the merger and $0.8  million  was  recorded  in capital in excess of par
value for stock incentive plans in 1998.

The following  information  presents certain statement of operations data of the
Company and GPC for the periods prior to the acquisition.

                                  (Unaudited)
                              Three Months Ended    Year Ended       Year Ended
     (in thousands)              Mar. 31, 1998     Dec. 31, 1997   Dec. 31, 1996
     ---------------------------------------------------------------------------
     Net sales for:
       Helix                        $25,872         $ 131,519         $128,383
       GPC                            5,622            25,557           23,282
     ---------------------------------------------------------------------------
       Combined                     $31,494         $ 157,076         $151,665
     ===========================================================================
     Net income (loss) for:
       Helix                        $ 2,941         $  21,315         $ 21,957
       GPC                           (1,075)            4,229            3,169
     ---------------------------------------------------------------------------
       Combined                     $ 1,866         $  25,544         $ 25,126
     ===========================================================================

During the third quarter of 1998, the Company recorded  restructuring  and other
special  charges  of  $2.5  million.   The  Company  restructured  its  domestic
operations to eliminate non-strategic  spending,  while redirecting resources to
the Company's global customer support structure and other strategic initiatives.
The charges  primarily  included  provisions  for  termination  benefits of $1.3
million for approximately 80 personnel,  exit costs related to a leased facility
of $1.0  million  and $0.2  million for the  impairment  of certain  assets.  At
December 31, 1998, $0.9 million of restructuring and special charges remained in
other accrued expenses, which the Company expects to be paid or amortized by the
third quarter of 1999.

The amounts accrued and charged  against the provisions  described above were as
follows:

                                                Cash Payments
                                                  and Asset    December 31, 1998
(in thousands)                 1998 Provision    Write-offs         Balance
--------------------------------------------------------------------------------
Employee termination benefits      $1,300          $1,000            $300
Exit leased facility                1,000             400             600
Asset impairment                      200             200               -
--------------------------------------------------------------------------------
Total                              $2,500          $1,600            $900
================================================================================

                                     - 42 -

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS




To The Board Of Directors and Stockholders
of Helix Technology Corporation:


     Our report on the  consolidated  financial  statements of Helix  Technology
Corporation  is included on Page 23 of this Form 10-K.  In  connection  with our
audits of such financial statements,  we have also audited the related financial
statement schedule listed in the index on Page 14 of this Form 10-K.

     In our opinion,  the financial  statement  schedule referred to above, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents  fairly,  in all  material  respects,  the  information  required to be
included therein.







/s/PricewaterhouseCoopers LLP
-----------------------------
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 29, 1999









                                           - 43 -
<PAGE>
<TABLE>


                                HELIX TECHNOLOGY CORPORATION
                                     QUARTERLY RESULTS
                                        (UNAUDITED)

<CAPTION>

                                          First     Second       Third      Fourth
(in thousands except per share data)     Quarter    Quarter     Quarter     Quarter
--------------------------------------------------------------------------------------
1998
<S>                                       <C>        <C>         <C>         <C>     
Net sales .............................   $ 31,494   $ 25,706    $ 18,550    $ 19,595
Gross profit ..........................     14,702      9,955       5,948       7,367
Operating income (loss) ...............      2,821     (1,873)     (4,765)       (944)
Net income (loss) .....................      1,866       (434)     (3,431)         79
Basic net income (loss) per share (1) .   $   0.08   $  (0.02)   $  (0.15)   $   0.00
Diluted net income (loss) per share (1)   $   0.08   $  (0.02)   $  (0.15)   $   0.00

1997
Net sales .............................   $ 34,408   $ 39,440    $ 42,508    $ 40,720
Gross profit ..........................     16,196     18,854      20,349      20,352
Operating income ......................      6,590      8,188       9,552       8,990
Net income ............................      4,896      6,266       7,343       7,039
Basic net income per share (1) ........   $   0.22   $   0.28    $   0.33    $   0.32
Diluted net income per share (1) ......   $   0.22   $   0.28    $   0.33    $   0.31

(1) All per share data  reflects a  two-for-one  common  stock  split  effective
November 1997.

</TABLE>







                                     - 44 -
<PAGE>

<TABLE>

                          HELIX TECHNOLOGY CORPORATION
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

              For the Years Ended December 31, 1998, 1997 and 1996

                                 (in thousands)

<CAPTION>

 
          Column A                     Column B           Column C              Column D    Column E
------------------------------------------------------------------------------------------------------
                                                          Additions
                                                   ------------------------           
                                      Balance at   Charged to    Charged to    Deductions   Balance at
                                      Beginning    Costs and       Other          from        End of
          Description                 of Period    Expenses      Accounts       Reserves      Period
------------------------------------------------------------------------------------------------------
Year ended December 31, 1998
<S>                                      <C>         <C>          <C>             <C>         <C>  
   Allowance for doubtful accounts       $240        $    5       $   -           $   17      $ 228
======================================================================================================
   Warranty                              $292        $1,375       $   -           $1,370      $ 297
======================================================================================================


Year ended December 31, 1997
   Allowance for doubtful accounts       $238        $   17       $   -           $   15      $ 240
======================================================================================================
   Warranty                              $303        $1,614       $   -           $1,625      $ 292
======================================================================================================


Year ended December 31, 1996
   Allowance for doubtful accounts       $240        $    6       $   -           $    8      $ 238
======================================================================================================
   Warranty                              $305        $1,305       $   -           $1,307      $ 303
======================================================================================================


</TABLE>


                                     - 45 -