Helios Technologies Reports Second Quarter 2024 Financial Results; Delivers Continued Sequential Margin and Cash Flow Improvements
Helios Technologies (NYSE: HLIO) reported Q2 2024 financial results, showing sequential improvements despite market challenges. Key highlights include:
- Net sales of $219.9 million, up 4% from Q1 2024
- Diluted EPS of $0.41 and Non-GAAP EPS of $0.64, up 21% from Q1 2024
- Generated $33.8 million in cash from operations, up 30% year-over-year
- Reduced total debt by $18.6 million, the fourth straight quarter of debt reduction
- Extended debt maturities to 2029 and increased available liquidity
However, the company moderated its 2H24 outlook due to softening end market conditions. Helios now expects full-year 2024 net sales of $825-$840 million, down from the initial $840-$860 million forecast. The company remains focused on operational efficiencies and cost discipline to maintain its adjusted EBITDA margin range of 19.5%-21.0%.
Helios Technologies (NYSE: HLIO) ha riportato i risultati finanziari del secondo trimestre 2024, evidenziando miglioramenti sequenziali nonostante le sfide del mercato. Punti salienti includono:
- Vendite nette di 219,9 milioni di dollari, in aumento del 4% rispetto al primo trimestre 2024
- EPS diluito di 0,41 dollari e EPS Non-GAAP di 0,64 dollari, in aumento del 21% rispetto al primo trimestre 2024
- Generato 33,8 milioni di dollari in contante dalle operazioni, in aumento del 30% anno su anno
- Ridotto il debito totale di 18,6 milioni di dollari, quarto trimestre consecutivo di riduzione del debito
- Estesi i termini di scadenza del debito fino al 2029 e aumentata la liquidità disponibile
Tuttavia, l'azienda ha moderato le previsioni per il secondo semestre del 2024 a causa del deterioramento delle condizioni del mercato finale. Helios ora prevede vendite nette per l'intero anno 2024 di 825-840 milioni di dollari, in calo rispetto alla previsione iniziale di 840-860 milioni di dollari. L'azienda rimane concentrata sull'efficienza operativa e sulla disciplina dei costi per mantenere il suo range di margine EBITDA rettificato del 19,5%-21,0%.
Helios Technologies (NYSE: HLIO) informó sobre los resultados financieros del segundo trimestre de 2024, mostrando mejoras secuenciales a pesar de los desafíos del mercado. Aspectos destacados incluyen:
- Ventas netas de 219,9 millones de dólares, un aumento del 4% en comparación con el primer trimestre de 2024
- EPS diluido de 0,41 dólares y EPS No-GAAP de 0,64 dólares, un incremento del 21% respecto al primer trimestre de 2024
- Generó 33,8 millones de dólares en efectivo de las operaciones, un aumento del 30% interanual
- Redujo la deuda total en 18,6 millones de dólares, el cuarto trimestre consecutivo de reducción de deuda
- Extendió los vencimientos de deuda hasta 2029 y aumentó la liquidez disponible
Sin embargo, la empresa moderó su perspectiva para la segunda mitad de 2024 debido al debilitamiento de las condiciones del mercado final. Helios ahora espera ventas netas para todo el año 2024 de 825 a 840 millones de dólares, en comparación con la previsión inicial de 840 a 860 millones de dólares. La empresa sigue enfocándose en la eficiencia operativa y la disciplina de costos para mantener su rango de margen EBITDA ajustado del 19,5% al 21,0%.
Helios Technologies (NYSE: HLIO)는 2024년 2분기 재무 실적을 발표하며 시장의 도전에도 불구하고 순차적인 개선을 보여주었습니다. 주요 하이라이트는 다음과 같습니다:
- 순 매출 2억 1,990만 달러, 2024년 1분기 대비 4% 증가
- 희석 주당 순이익(EPS) 0.41달러 및 비GAAP 주당 순이익 0.64달러, 2024년 1분기 대비 21% 증가
- 운영에서 3,380만 달러의 현금 생성, 전년 대비 30% 증가
- 총부채를 1,860만 달러 줄였으며, 부채 감소 4분기 연속
- 2029년까지 부채 만기를 연장하고 이용 가능한 유동성을 증가시킴
그러나 회사는 최종 시장 조건의 약화로 인해 2024년 하반기 전망을 완화했습니다. Helios는 이제 2024년 전체 연도 순 매출이 8억 2500만 달러에서 8억 4000만 달러에 이를 것으로 예상하며, 초기 8억 4000만 달러에서 8억 6000만 달러의 예측보다 낮습니다. 회사는 조정된 EBITDA 마진 범위인 19.5%-21.0%를 유지하기 위해 운영 효율성과 비용 절감에 집중하고 있습니다.
Helios Technologies (NYSE: HLIO) a publié ses résultats financiers pour le deuxième trimestre 2024, montrant des améliorations séquentielles malgré les défis du marché. Les points marquants incluent:
- Ventes nettes de 219,9 millions de dollars, en hausse de 4 % par rapport au premier trimestre 2024
- BPA dilué de 0,41 dollar et BPA non-GAAP de 0,64 dollar, en hausse de 21 % par rapport au premier trimestre 2024
- Généré 33,8 millions de dollars de liquidités provenant des opérations, en hausse de 30 % d'une année sur l'autre
- Réduit le total de la dette de 18,6 millions de dollars, le quatrième trimestre consécutif de réduction de la dette
- Prolongé les échéances de la dette jusqu'en 2029 et augmenté la liquidité disponible
Cependant, l'entreprise a modéré ses prévisions pour le second semestre 2024 en raison d'un affaiblissement des conditions du marché final. Helios s'attend maintenant à des ventes nettes pour l'année entière 2024 de 825 à 840 millions de dollars, en baisse par rapport à la prévision initiale de 840 à 860 millions de dollars. L'entreprise reste concentrée sur l'efficacité opérationnelle et la discipline des coûts pour maintenir sa plage de marge EBITDA ajustée de 19,5 % à 21,0 %.
Helios Technologies (NYSE: HLIO) hat die Finanzzahlen für das zweite Quartal 2024 veröffentlicht und zeigt sequenzielle Verbesserungen trotz der Herausforderungen auf dem Markt. Wichtige Highlights sind:
- Nettoumsatz von 219,9 Millionen US-Dollar, ein Anstieg von 4% gegenüber dem ersten Quartal 2024
- Verwässertes EPS von 0,41 USD und Non-GAAP EPS von 0,64 USD, ein Anstieg von 21% im Vergleich zum ersten Quartal 2024
- Generierte 33,8 Millionen US-Dollar an Cash aus dem operativen Geschäft, ein Anstieg von 30% im Jahresvergleich
- Gesamtschulden um 18,6 Millionen US-Dollar reduziert, der vierte Quartalsanstieg in Folge bei der Schuldenreduzierung
- Fälligkeiten der Schulden bis 2029 verlängert und die verfügbare Liquidität erhöht
Das Unternehmen hat jedoch seine Prognose für die zweite Hälfte 2024 aufgrund schwächelnder Marktbedingungen moderiert. Helios erwartet nun einen Nettoumsatz für das Gesamtjahr 2024 von 825 bis 840 Millionen US-Dollar, was einen Rückgang gegenüber der ursprünglichen Prognose von 840 bis 860 Millionen US-Dollar darstellt. Das Unternehmen konzentriert sich weiterhin auf operative Effizienz und Kostendisziplin, um seinen bereinigten EBITDA-Margenbereich von 19,5 % bis 21,0 % aufrechtzuerhalten.
- Sequential net sales growth of 4% from Q1 2024 to $219.9 million
- Non-GAAP EPS increased 21% sequentially to $0.64
- Cash from operations grew 30% year-over-year to $33.8 million
- Reduced total debt by $18.6 million, marking fourth consecutive quarter of debt reduction
- Extended debt maturities to 2029 and increased available liquidity
- Maintained adjusted EBITDA margin guidance of 19.5%-21.0% despite lowered revenue outlook
- Net sales decreased 3% year-over-year to $219.9 million
- Gross margin contracted 120 basis points year-over-year to 32.1%
- Operating income declined 12% year-over-year to $26.0 million
- Diluted EPS decreased 20% year-over-year to $0.41
- Lowered full-year 2024 net sales guidance to $825-$840 million from $840-$860 million
- Reduced full-year 2024 net income guidance to $45-$52 million from $50-$63 million
Insights
Helios Technologies' Q2 2024 results show mixed performance with some positive trends amid challenging market conditions. The company reported
Key positives include:
- Sequential margin expansion (gross margin +40 bps, operating margin +220 bps)
$33.8 million cash from operations, up30% YoY$18.6 million debt reduction- Improved cash conversion cycle
However, the company faces softening end market conditions, leading to a moderated outlook for 2H 2024. The updated full-year guidance suggests continued challenges, with revenue expectations lowered to
Helios' performance reflects broader market trends across its key segments. The Hydraulics segment saw weakness in agriculture, mobile and industrial markets, particularly in EMEA and Americas. However, APAC showed growth, indicating regional variations in demand.
In the Electronics segment, health & wellness growth partially offset declines in recreational, mobile and industrial markets. This suggests a shift in consumer priorities and spending patterns.
The company's 'in the region, for the region' strategy and focus on engineered solutions position it well for long-term growth. However, the negative U.S. PMI data and reduced guidance from major customers indicate ongoing challenges in the near term.
Investors should monitor end-market dynamics, particularly in agriculture and industrial sectors, as well as regional economic trends, especially in APAC where Helios is seeing growth.
Helios' focus on integrated operating company model and electro-hydraulics solutions is strategically sound in a market trending towards more sophisticated, interconnected systems. The acquisition of i3 Product Development enhances their electronic controls capabilities, potentially opening new avenues for growth.
The company's emphasis on engineering capabilities and system solutions aligns with industry trends towards more advanced, efficient hydraulic and electronic systems. This positions Helios well for future opportunities in areas like precision agriculture, smart manufacturing and electrification of mobile equipment.
However, the current market softness, particularly in recreational and industrial sectors, may slow the adoption of new technologies in the short term. Helios should focus on R&D efficiency and targeted innovation to maintain its competitive edge while managing costs in this challenging environment.
-
Delivered net sales of
$219.9 million 4% over 1Q24 with Hydraulics up2% and Electronics up7% - Demonstrated sequential margin improvement over 1Q24 across both gross (+40 bps) and operating (+220 bps) margins from improved volume, operational initiatives, and cost management
-
Achieved diluted EPS of
$0.41 $0.64 21% over 1Q24 -
Improved the cash conversion cycle through working capital initiatives; Generated
$33.8 million 30% over the year-ago level -
Reduced
$18.6 million - Extended debt maturities to 2029, increased available liquidity, and reduced spreads optimizing our capital structure to provide financial flexibility to execute our strategic priorities
- Moderating 2H24 outlook to reflect softening end market conditions reducing second half visibility; Focused on controlling the controllables: working capital, operational efficiencies, and cost discipline
“For the third consecutive quarter, the Helios team delivered financial results that met or slightly beat our guidance. The second quarter’s sequential top line growth, expanding margins, and disciplined working capital management validate that the adjustments we have made in the business are yielding positive outcomes. We improved our cash conversion cycle and applied the cash generated from operations to reduce debt for the fourth consecutive quarter. Importantly, we are committed to our strategy to become a leader in premium engineered hydraulic and electronic system solutions which are mission critical for our customers’ applications. Our structure enables us to maximize our engineering capabilities across the organization, leverage our strong supplier relationships, and benefit from our market and geographic diversification. We are well positioned as strategic global partners for our customers as an integrated operating company with our ‘in the region, for the region’ strategy,” said Sean Bagan, Interim President, Chief Executive Officer, and Chief Financial Officer of Helios.
“Our primary strategic focus is threefold: (i) exceed our customer’s expectations by delivering exceptional products, services and solutions, ensuring every interaction leaves them delighted and loyal to our brands, (ii) foster a culture of continuous learning empowering our employees to thrive and grow, creating collaboration and innovation, and (iii) secure long-term organizational success through achieving sustainable profitable growth. We acknowledge the softening conditions in several of our end markets and are moderating our full year 2024 outlook to reflect such. Nonetheless, there is much within our control to deliver increasing value and we remain well positioned to accelerate our profitable sales growth especially as markets strengthen,” Mr. Bagan concluded.
Second Quarter 2024 Consolidated Results
| For the Three Months Ended | ||||||||||||||
| ($ in millions, except per share data) (Unaudited) |
June 29, 2024 |
July 1, 2023 |
Change | % Change | ||||||||||
| Net sales | $ |
219.9 |
|
$ |
227.6 |
|
$ |
(7.7 |
) |
(3 |
%) |
|||
| Gross profit | $ |
70.6 |
|
$ |
75.8 |
|
$ |
(5.2 |
) |
(7 |
%) |
|||
| Gross margin |
|
32.1 |
% |
|
33.3 |
% |
|
(120 |
) |
bps | ||||
| Operating income | $ |
26.0 |
|
$ |
29.5 |
|
$ |
(3.5 |
) |
(12 |
%) |
|||
| Operating margin |
|
11.8 |
% |
|
13.0 |
% |
|
(120 |
) |
bps | ||||
| Non-GAAP adjusted operating margin* |
|
16.4 |
% |
|
18.5 |
% |
|
(210 |
) |
bps | ||||
| Net income | $ |
13.6 |
|
$ |
16.8 |
|
$ |
(3.2 |
) |
(19 |
%) |
|||
| Diluted EPS | $ |
0.41 |
|
$ |
0.51 |
|
$ |
(0.10 |
) |
(20 |
%) |
|||
| Non-GAAP net income* | $ |
21.5 |
|
$ |
26.8 |
|
$ |
(5.3 |
) |
(20 |
%) |
|||
| Diluted Non-GAAP EPS* | $ |
0.64 |
|
$ |
0.81 |
|
$ |
(0.17 |
) |
(21 |
%) |
|||
| Adjusted EBITDA* | $ |
44.2 |
|
$ |
50.1 |
|
$ |
(5.9 |
) |
(12 |
%) |
|||
| Adjusted EBITDA margin* |
|
20.1 |
% |
|
22.0 |
% |
|
(190 |
) |
bps | ||||
* Adjusted numbers are not measures determined in accordance with generally accepted accounting principles in
Sales
-
Changes in Market Mix: Compared with the prior-year period, Electronics segment revenue declined
1% as the Health & Wellness market did not fully offset weakness in recreational, mobile, and industrial markets; Hydraulics sales were down4% reflecting the weakness in agriculture, mobile, and industrial market. Compared with the first quarter 2024, the Electronics segment grew7% and the Hydraulics segment revenue improved2% . Sales included$1.2 million -
By Region: sales in
Asia Pacific ("APAC”) grew12% while there was an11% decline inEurope , theMiddle East andAfrica (“EMEA”) and5% decline in theAmericas compared with the year ago period. Compared with the first quarter 2024, APAC increased10% andAmericas increased3% , while EMEA was relatively unchanged. -
Other Impacts: foreign currency (FX) translation unfavorably impacted sales by
$0.9 million
Profits and margins
-
Gross profit and margin impacts: gross profit declined
$5.2 million $3.4 million 5% , and gross margin expanded 40 basis points. -
Selling, engineering and administrative (“SEA”) expenses: SEA declined
$1.3 million 3% compared with the year ago period reflecting cost containment actions. -
Amortization of intangible assets:
$7.9 million 5% compared with the year ago period as some intangibles have fully amortized since the comparable period.
Non-operating items
-
Net interest expense: up
$0.7 million $0.5 million -
Effective tax rate: relatively unchanged at
23.0% compared with22.9% in the year ago period.
Net income, diluted earnings per share (“EPS”), Non-GAAP EPS, and adjusted EBITDA margin
-
GAAP net income: down
$3.2 million $0.10 $4.4 million $0.13 -
Diluted Non-GAAP EPS: declined
$0.17 $0.11 21% . - Adjusted EBITDA margin: contracted 190 basis points compared with the year ago period driven by the items discussed previously. Compared with the first quarter of 2024, up by 190 basis points.
Hydraulics Segment Review
(Refer to sales by geographic region and segment data in accompanying tables)
| Hydraulics | For the Three Months Ended | |||||||||||||
| ($ in millions) (Unaudited) |
June 29, 2024 | July 1, 2023 | Change | % Change | ||||||||||
| Net Sales | ||||||||||||||
$ |
59.5 |
|
$ |
60.6 |
|
$ |
(1.1 |
) |
(2 |
%) |
||||
| EMEA |
|
42.8 |
|
|
51.3 |
|
|
(8.5 |
) |
(17 |
%) |
|||
| APAC |
|
43.4 |
|
|
40.5 |
|
|
2.9 |
|
7 |
% |
|||
| Total Segment Sales | $ |
145.7 |
|
$ |
152.4 |
|
$ |
(6.7 |
) |
(4 |
%) |
|||
| Gross Profit | $ |
44.9 |
|
$ |
49.7 |
|
$ |
(4.8 |
) |
(10 |
%) |
|||
| Gross Margin |
|
30.8 |
% |
|
32.6 |
% |
|
(180 |
) |
bps | ||||
| SEA Expenses | $ |
21.0 |
|
$ |
22.7 |
|
$ |
(1.7 |
) |
(7 |
%) |
|||
| Operating Income | $ |
23.9 |
|
$ |
27.0 |
|
$ |
(3.1 |
) |
(11 |
%) |
|||
| Operating Margin |
|
16.4 |
% |
|
17.7 |
% |
|
(130 |
) |
bps | ||||
Second Quarter 2024 Hydraulics Segment Review
-
Sales: improving conditions in APAC helped to offset weakness in EMEA and
Americas , resulting in a4% year over year contraction in segment sales. Sales declined in the agriculture, mobile, and industrial end markets compared with the year ago period. FX had an unfavorable$0.8 million 2% driven by higher demand in APAC. -
Gross profit and margin drivers: lower gross profit and margin, compared with the year ago period was primarily the result of fixed cost absorption on lower volume and higher labor costs. Compared with the first quarter of 2024, gross profit grew
1% while gross margin declined 50 basis points primarily due to product mix. -
Operating income and operating margin: lower operating income and margin, compared with the year ago period reflect impact of lower gross profit offset somewhat by operating cost reductions. Compared with the first quarter 2024, operating income increased
10% and margin was up 110 basis points.
Electronics Segment Review
(Refer to sales by geographic region and segment data in accompanying tables)
| Electronics | For the Three Months Ended | |||||||||||||
| ($ in millions) (Unaudited) |
June 29, 2024 | July 1, 2023 | Change | % Change | ||||||||||
| Net Sales | ||||||||||||||
$ |
57.8 |
|
$ |
63.2 |
|
$ |
(5.4 |
) |
(9 |
%) |
||||
| EMEA |
|
9.0 |
|
|
7.0 |
|
|
2.0 |
|
29 |
% |
|||
| APAC |
|
7.4 |
|
|
5.0 |
|
|
2.4 |
|
48 |
% |
|||
| Total Segment Sales | $ |
74.2 |
|
$ |
75.2 |
|
$ |
(1.0 |
) |
(1 |
%) |
|||
| Gross Profit | $ |
25.7 |
|
$ |
26.1 |
|
$ |
(0.4 |
) |
(2 |
%) |
|||
| Gross Margin |
|
34.6 |
% |
|
34.7 |
% |
|
(10 |
) |
bps | ||||
| SEA Expenses | $ |
15.4 |
|
$ |
14.1 |
|
$ |
1.3 |
|
9 |
% |
|||
| Operating Income | $ |
10.3 |
|
$ |
12.0 |
|
$ |
(1.7 |
) |
(14 |
%) |
|||
| Operating Margin |
|
13.9 |
% |
|
16.0 |
% |
|
(210 |
) |
bps | ||||
Second Quarter 2024 Electronics Segment Review
-
Sales: increased demand in APAC and EMEA helped to offset the decline in the
Americas compared with the year ago period. Acquisitions contributed$1.2 million 7% driven by growth in health and wellness. FX had an unfavorable$0.1 million -
Gross profit and margin drivers: slightly lower gross profit and margin compared to the year ago period was primarily due to lower volume and the mix in sales. Compared with the first quarter of 2024, gross profit grew
13% and gross margin expanded 200 basis points driven primarily by higher volumes and operational focus on efficiencies and cost reductions. -
Operating income and operating margin: the decline in operating income and contraction of operating margin, compared with the year ago period, were driven primarily by negative revenue mix and incremental costs associated with the 2023 acquisitions partially offset by lower material costs. Compared with the first quarter of 2024, operating income grew
$3.2 million 45% and margin expanded 370 basis points driven primarily by leverage from higher sales volume.
Balance Sheet and Cash Flow Review
-
Refinanced debt at quarter end: total debt at quarter-end was
$502.7 million 8.5% from$549.1 million $7.1 million -
Cash and cash equivalents: as of June 29, 2024 were
$45.0 million 21% sequentially from the first quarter 2024 demonstrating the focus on cash management. -
Inventory: decreased by
$7.6 million 4% , to$206.3 million -
Pro-forma net debt-to-adjusted EBITDA: slight sequential decline to 3.0x at quarter end compared with 3.1x at the end of the first quarter. At the end of the second quarter 2024, the Company had
$308.3 million -
Net cash provided by operations: was
$33.8 million $26.1 million -
Capital expenditures: were
$8.1 million 3.7% of sales. This is down from$10.5 million 4.6% of sales, as the Company made capital investments in our Centers of Excellence and implemented automation processes in the year ago period. -
Dividends: Paid 110th sequential quarterly cash dividend of
$0.09
Moderating Second Half / Full Year 2024 Outlook:
Mr. Bagan continued, “Given the softening in demand documented by various industry groups regarding weakness in the near term, the order book trends we are seeing for the second half, a prolonged period of negative
The following provides the Company’s expectations for 2024 as of August 5, 2024. This assumes constant currency, using quarter end rates, and that markets served are not further impacted by the macroeconomic or the geopolitical environment.
| 2023 Actual | Initial 2024 Outlook | Updated 2024 Outlook | ||||
| Total net sales |
|
|
|
|
|
|
| Net income |
|
|
|
|
|
|
| Adjusted EBITDA |
|
|
|
|
|
|
| Adjusted EBITDA margin |
|
|
|
|
|
|
| Interest expense |
|
|
|
|
|
|
| Effective tax rate |
|
|
|
|
|
|
| Depreciation |
|
|
|
|
|
|
| Amortization |
|
|
|
|
|
|
| Capital expenditures % net sales |
|
|
|
|
|
|
| Diluted EPS |
|
|
|
|
|
|
| Diluted Non-GAAP EPS |
|
|
|
|
|
Forward-looking adjusted EBITDA, adjusted EBITDA margin and diluted Non-GAAP EPS represent Non-GAAP financial measures. The Company has presented the comparable GAAP figures in the table above. See comments on reconciliation of forward-looking non-GAAP financial measures in the Forward-Looking Information included in this release describing the safe harbor provided within the meaning of Section 21E of the Securities Exchange Act of 1934.
Webcast
The Company will host a conference call and webcast tomorrow, August 6, 2024, at 9:00 a.m. Eastern Time to review its financial and operating results and discuss its corporate strategies and outlook. A question-and-answer session will follow. The conference call can be accessed by calling (201) 689-8573. The audio webcast will be available at www.heliostechnologies.com.
A telephonic replay will be available from approximately 1:00 p.m. ET on the day of the call through Tuesday, August 13, 2024. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13746830. The webcast replay will be available in the investor relations section of the Company’s website at www.heliostechnologies.com, where a transcript will also be posted once available.
About Helios Technologies
Helios Technologies is a global leader in highly engineered motion control and electronic controls technology for diverse end markets, including construction, material handling, agriculture, energy, recreational vehicles, marine and health and wellness. Helios sells its products to customers in over 90 countries around the world. Its strategy for growth is to be the leading provider in niche markets, with premier products and solutions through innovative product development and acquisition. The Company has paid a cash dividend to its shareholders every quarter since becoming a public company in 1997. For more information please visit: www.heliostechnologies.com and follow us on LinkedIn.
FORWARD-LOOKING INFORMATION
This news release contains “forward‐looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward‐looking statements involve risks and uncertainties, and actual results may differ materially from those expressed or implied by such statements. They include statements regarding current expectations, estimates, forecasts, projections, our beliefs, and assumptions made by Helios Technologies, Inc. (“Helios” or the “Company”), its directors or its officers about the Company and the industry in which it operates, and assumptions made by management, and include among other items, (i) the Company’s strategies regarding growth, including its intention to develop new products and make acquisitions; (ii) the effectiveness of creating the Centers of Excellence; (iii) trends affecting the Company’s financial condition or results of operations; (iv) the Company’s ability to continue to control costs and to meet its liquidity and other financing needs; (v) the Company’s ability to declare and pay dividends; and (vi) the Company’s ability to respond to changes in customer demand domestically and internationally, including as a result of the cyclical nature of our business and the standardization. In addition, we may make other written or oral statements, which constitute forward-looking statements, from time to time. Words such as “may,” “expects,” “projects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. Similarly, statements that describe our future plans, objectives or goals also are forward-looking statements. These statements are not guaranteeing future performance and are subject to a number of risks and uncertainties. Our actual results may differ materially from what is expressed or forecasted in such forward-looking statements, and undue reliance should not be placed on such statements. All forward-looking statements are made as of the date hereof, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Factors that could cause the actual results to differ materially from what is expressed or forecasted in such forward‐looking statements include, but are not limited to, (i) risks related to the Company’s previous investigation of its former CEO and the related management transition that is in process (ii) the Company’s ability to respond to global economic trends and changes in customer demand domestically and internationally, including as a result of standardization and the cyclical nature of our business, which can adversely affect the demand for capital goods; (iii) supply chain disruption and the potential inability to procure goods; (iv) conditions in the capital markets, including the interest rate environment and the availability of capital on terms acceptable to us, or at all; (v) global and regional economic and political conditions, including inflation (or hyperinflation) exchange rates, changes in the cost or availability of energy, transportation, the availability of other necessary supplies and services and recession; (vi) changes in the competitive marketplace that could affect the Company’s revenue and/or cost bases, such as increased competition, lack of qualified engineering, marketing, management or other personnel, and increased labor and raw materials costs; (vii) risks related to health epidemics, pandemics and similar outbreaks, which may among other things, adversely affect our supply chain, material costs, and work force and may have material adverse effects on our business, financial position, results of operations and/or cash flows; (viii) risks related to our international operations, including the potential impact of the ongoing conflict in
Helios has presented non-GAAP measures including adjusted operating income, adjusted operating margin, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, net debt-to-adjusted EBITDA, adjusted net income, and adjusted net income per diluted share and sales in constant currency. Helios believes that providing these specific Non-GAAP figures are important for investors and other readers of Helios financial statements, as they are used as analytical indicators by Helios management to better understand operating performance. The determination of the amounts that are excluded from these Non-GAAP measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income recognized in a given period. You should not consider the inclusion of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. Please carefully review the Non-GAAP reconciliations to the most directly comparable GAAP measures and the related additional information provided throughout. Because these metrics are Non-GAAP measures and are thus susceptible to varying calculations, these figures, as presented, may not be directly comparable to other similarly titled measures used by other companies.
This news release also presents forward-looking statements regarding Non-GAAP measures, including adjusted EBITDA, adjusted EBITDA margin and adjusted net income per diluted share. The Company is unable to present a quantitative reconciliation of these forward-looking Non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict the necessary components of such GAAP measures without unreasonable effort or expense. In addition, the Company believes that such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the Company’s 2024 financial results. These Non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between the Company’s actual results and preliminary financial data set forth above may be material.
Financial Tables Follow:
HELIOS TECHNOLOGIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share data) (Unaudited) |
|||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||
| June 29, | July 1, | June 29, | July 1 | ||||||||||||||||||
2024 |
2023 |
% Change | 2024 |
2023 |
% Change | ||||||||||||||||
| Net sales | $ |
219.9 |
|
$ |
227.6 |
|
(3 |
)% |
$ |
431.9 |
|
$ |
440.8 |
|
(2 |
)% |
|||||
| Cost of sales |
|
149.3 |
|
|
151.8 |
|
(2 |
)% |
|
294.1 |
|
|
294.0 |
|
0 |
% |
|||||
| Gross profit |
|
70.6 |
|
|
75.8 |
|
(7 |
)% |
|
137.8 |
|
|
146.8 |
|
(6 |
)% |
|||||
| Gross margin |
|
32.1 |
% |
|
33.3 |
% |
|
31.9 |
% |
|
33.3 |
% |
|||||||||
| Selling, engineering and administrative expenses |
|
36.7 |
|
|
38.0 |
|
(3 |
)% |
|
75.7 |
|
|
76.1 |
|
(1 |
)% |
|||||
| Amortization of intangible assets |
|
7.9 |
|
|
8.3 |
|
(5 |
)% |
|
15.7 |
|
|
16.4 |
|
(4 |
)% |
|||||
| Operating income |
|
26.0 |
|
|
29.5 |
|
(12 |
)% |
|
46.4 |
|
|
54.3 |
|
(15 |
)% |
|||||
| Operating margin |
|
11.8 |
% |
|
13.0 |
% |
|
10.7 |
% |
|
12.3 |
% |
|||||||||
| Interest expense, net |
|
8.5 |
|
|
7.8 |
|
9 |
% |
|
16.7 |
|
|
14.0 |
|
19 |
% |
|||||
| Foreign currency transaction loss, net |
|
0.2 |
|
|
0.1 |
|
100 |
% |
|
0.5 |
|
|
0.5 |
|
- |
% |
|||||
| Other non-operating (income) expense, net |
|
(0.3 |
) |
|
(0.2 |
) |
50 |
% |
|
(0.3 |
) |
|
- |
|
|||||||
| Income before income taxes |
|
17.6 |
|
|
21.8 |
|
(19 |
)% |
|
29.5 |
|
|
39.8 |
|
(26 |
)% |
|||||
| Income tax provision |
|
4.0 |
|
|
5.0 |
|
(20 |
)% |
|
6.8 |
|
|
9.2 |
|
(26 |
)% |
|||||
| Net income | $ |
13.6 |
|
$ |
16.8 |
|
(19 |
)% |
$ |
22.7 |
|
$ |
30.6 |
|
(26 |
)% |
|||||
| Net income per share: | |||||||||||||||||||||
| Basic | $ |
0.41 |
|
$ |
0.51 |
|
(20 |
)% |
$ |
0.69 |
|
$ |
0.94 |
|
(27 |
)% |
|||||
| Diluted | $ |
0.41 |
|
$ |
0.51 |
|
(20 |
)% |
$ |
0.68 |
|
$ |
0.93 |
|
(27 |
)% |
|||||
| Weighted average shares outstanding: | |||||||||||||||||||||
| Basic |
|
33.2 |
|
|
32.8 |
|
|
33.2 |
|
|
32.7 |
|
|||||||||
| Diluted |
|
33.3 |
|
|
32.9 |
|
|
33.3 |
|
|
32.8 |
|
|||||||||
| Dividends declared per share | $ |
0.09 |
|
$ |
0.09 |
|
$ |
0.18 |
|
$ |
0.18 |
|
|||||||||
HELIOS TECHNOLOGIES CONSOLIDATED BALANCE SHEETS (In millions, except per share data) |
|||||||
| June 29, 2024 | December 30, 2023 | ||||||
| (Unaudited) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ |
45.0 |
|
$ |
32.4 |
|
|
| Accounts receivable, net of allowance for | |||||||
| credit losses of |
|
132.6 |
|
|
114.8 |
|
|
| Inventories, net |
|
206.3 |
|
|
215.1 |
|
|
| Income taxes receivable |
|
9.9 |
|
|
11.3 |
|
|
| Other current assets |
|
28.8 |
|
|
23.1 |
|
|
| Total current assets |
|
422.6 |
|
|
396.7 |
|
|
| Property, plant and equipment, net |
|
223.6 |
|
|
227.9 |
|
|
| Deferred income taxes |
|
4.6 |
|
|
1.7 |
|
|
| Goodwill |
|
506.1 |
|
|
514.0 |
|
|
| Other intangible assets, net |
|
405.0 |
|
|
426.4 |
|
|
| Other assets |
|
19.0 |
|
|
23.7 |
|
|
| Total assets | $ |
1,580.9 |
|
$ |
1,590.4 |
|
|
| Liabilities and shareholders’ equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ |
67.4 |
|
$ |
70.3 |
|
|
| Accrued compensation and benefits |
|
24.2 |
|
|
19.4 |
|
|
| Other accrued expenses and current liabilities |
|
26.9 |
|
|
27.0 |
|
|
| Current portion of long-term non-revolving debt, net |
|
17.2 |
|
|
23.2 |
|
|
| Dividends payable |
|
3.0 |
|
|
3.0 |
|
|
| Income taxes payable |
|
6.0 |
|
|
2.0 |
|
|
| Total current liabilities |
|
144.7 |
|
|
144.9 |
|
|
| Revolving lines of credit |
|
190.4 |
|
|
199.8 |
|
|
| Long-term non-revolving debt, net |
|
291.7 |
|
|
298.3 |
|
|
| Deferred income taxes |
|
54.5 |
|
|
57.1 |
|
|
| Other noncurrent liabilities |
|
33.1 |
|
|
35.7 |
|
|
| Total liabilities |
|
714.4 |
|
|
735.8 |
|
|
| Commitments and contingencies | |||||||
| Shareholders’ equity: | |||||||
| Preferred stock, par value |
|||||||
| no shares issued or outstanding |
|
- |
|
|
- |
|
|
| Common stock, par value |
|||||||
| 33.2 and 33.1 shares issued and outstanding |
|
- |
|
|
- |
|
|
| Capital in excess of par value |
|
439.7 |
|
|
434.4 |
|
|
| Retained earnings |
|
492.4 |
|
|
475.6 |
|
|
| Accumulated other comprehensive loss |
|
(65.6 |
) |
|
(55.4 |
) |
|
| Total shareholders’ equity |
|
866.5 |
|
|
854.6 |
|
|
| Total liabilities and shareholders’ equity | $ |
1,580.9 |
|
$ |
1,590.4 |
|
|
HELIOS TECHNOLOGIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
|||||||
| For the Six Months Ended | |||||||
| June 29, 2024 | July 1, 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ |
22.7 |
|
$ |
30.6 |
|
|
| Adjustments to reconcile net income to | |||||||
| net cash provided by operating activities: | |||||||
| Depreciation and amortization |
|
31.7 |
|
|
31.3 |
|
|
| Stock-based compensation expense |
|
6.7 |
|
|
6.5 |
|
|
| Amortization of debt issuance costs |
|
0.7 |
|
|
0.3 |
|
|
| Benefit for deferred income taxes |
|
(1.3 |
) |
|
(2.1 |
) |
|
| Forward contract losses, net |
|
- |
|
|
0.4 |
|
|
| Other, net |
|
0.8 |
|
|
0.4 |
|
|
| (Increase) decrease in, net of acquisitions: | |||||||
| Accounts receivable |
|
(19.5 |
) |
|
(8.5 |
) |
|
| Inventories |
|
6.3 |
|
|
(9.6 |
) |
|
| Income taxes receivable |
|
1.2 |
|
|
3.3 |
|
|
| Other current assets |
|
(6.0 |
) |
|
(4.9 |
) |
|
| Other assets |
|
3.9 |
|
|
3.1 |
|
|
| Increase (decrease) in, net of acquisitions: | |||||||
| Accounts payable |
|
(1.9 |
) |
|
(3.5 |
) |
|
| Accrued expenses and other liabilities |
|
5.2 |
|
|
(5.6 |
) |
|
| Income taxes payable |
|
4.0 |
|
|
2.7 |
|
|
| Other noncurrent liabilities |
|
(2.9 |
) |
|
(3.3 |
) |
|
| Contingent consideration payments in excess acquisition date fair value |
|
- |
|
|
(2.7 |
) |
|
| Net cash provided by operating activities |
|
51.6 |
|
|
38.4 |
|
|
| Cash flows from investing activities: | |||||||
| Business acquisitions, net of cash acquired |
|
- |
|
|
(114.8 |
) |
|
| Capital expenditures |
|
(13.6 |
) |
|
(19.6 |
) |
|
| Proceeds from dispositions of property, plant and equipment |
|
- |
|
|
0.2 |
|
|
| Cash settlement of forward contracts |
|
- |
|
|
0.4 |
|
|
| Software development costs |
|
(1.8 |
) |
|
(2.0 |
) |
|
| Net cash used in investing activities |
|
(15.4 |
) |
|
(135.8 |
) |
|
| Cash flows from financing activities: | |||||||
| Borrowings on revolving credit facilities |
|
37.1 |
|
|
142.7 |
|
|
| Repayment of borrowings on revolving credit facilities |
|
(43.6 |
) |
|
(188.6 |
) |
|
| Borrowings on long-term non-revolving debt |
|
126.8 |
|
|
160.0 |
|
|
| Repayment of borrowings on long-term non-revolving debt |
|
(138.5 |
) |
|
(12.3 |
) |
|
| Proceeds from stock issued |
|
1.0 |
|
|
1.0 |
|
|
| Dividends to shareholders |
|
(6.0 |
) |
|
(5.9 |
) |
|
| Payment of employee tax withholding on equity award vestings |
|
(2.4 |
) |
|
(2.1 |
) |
|
| Payment of contingent consideration liability |
|
- |
|
|
(3.4 |
) |
|
| Other financing activities |
|
(4.1 |
) |
|
(1.3 |
) |
|
| Proceeds received upon termination of Cash Flow hedge instruments |
|
7.1 |
|
|
- |
|
|
| Net cash (used in) provided by financing activities |
|
(22.6 |
) |
|
90.1 |
|
|
| Effect of exchange rate changes on cash and cash equivalents |
|
(1.0 |
) |
|
1.1 |
|
|
| Net increase (decrease) in cash and cash equivalents |
|
12.6 |
|
|
(6.2 |
) |
|
| Cash and cash equivalents, beginning of period |
|
32.4 |
|
|
43.7 |
|
|
| Cash and cash equivalents, end of period | $ |
45.0 |
|
$ |
37.5 |
|
|
HELIOS TECHNOLOGIES SEGMENT DATA (In millions) (Unaudited) |
|||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||
| June 29, 2024 |
July 1, 2023 |
June 29, 2024 |
July 1, 2023 |
||||||||||||
| Net Sales: | |||||||||||||||
| Hydraulics | $ |
145.7 |
|
$ |
152.4 |
|
$ |
288.1 |
|
$ |
300.1 |
|
|||
| Electronics |
|
74.2 |
|
|
75.2 |
|
|
143.8 |
|
|
140.7 |
|
|||
| Consolidated | $ |
219.9 |
|
$ |
227.6 |
|
$ |
431.9 |
|
$ |
440.8 |
|
|||
| Gross profit and margin: | |||||||||||||||
| Hydraulics | $ |
44.9 |
|
$ |
49.7 |
|
$ |
89.5 |
|
$ |
99.6 |
|
|||
|
30.8 |
% |
|
32.6 |
% |
|
31.1 |
% |
|
33.2 |
% |
||||
| Electronics |
|
25.7 |
|
|
26.1 |
|
|
48.3 |
|
|
47.2 |
|
|||
|
34.6 |
% |
|
34.7 |
% |
|
33.6 |
% |
|
33.5 |
% |
||||
| Consolidated | $ |
70.6 |
|
$ |
75.8 |
|
$ |
137.8 |
|
$ |
146.8 |
|
|||
|
32.1 |
% |
|
33.3 |
% |
|
31.9 |
% |
|
33.3 |
% |
||||
| Operating income (loss) and margin: | |||||||||||||||
| Hydraulics | $ |
23.9 |
|
$ |
27.0 |
|
$ |
45.7 |
|
$ |
55.0 |
|
|||
|
16.4 |
% |
|
17.7 |
% |
|
15.9 |
% |
|
18.3 |
% |
||||
| Electronics |
|
10.3 |
|
|
12.0 |
|
|
17.4 |
|
|
19.5 |
|
|||
|
13.9 |
% |
|
16.0 |
% |
|
12.1 |
% |
|
13.9 |
% |
||||
| Corporate and other |
|
(8.2 |
) |
|
(9.5 |
) |
|
(16.7 |
) |
|
(20.2 |
) |
|||
| Consolidated | $ |
26.0 |
|
$ |
29.5 |
|
$ |
46.4 |
|
$ |
54.3 |
|
|||
|
11.8 |
% |
|
13.0 |
% |
|
10.7 |
% |
|
12.3 |
% |
||||
ORGANIC AND ACQUIRED NET SALES 1 (In millions) (Unaudited) |
||||||||||||||||||||||||
| For the Three Months Ended | For the Year Ended | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
| April 1, | July 1, | September 30, | December 30, | December 30, | March 30, | June 29, | June 29, | |||||||||||||||||
2023 |
2023 |
2023 |
2023 |
2023 |
2024 |
2024 |
2024 |
|||||||||||||||||
| Hydraulics | ||||||||||||||||||||||||
| Organic | $ |
134.0 |
$ |
137.2 |
$ |
121.0 |
$ |
126.6 |
$ |
518.8 |
$ |
140.5 |
$ |
145.7 |
$ |
286.2 |
||||||||
| Acquisition |
|
13.7 |
|
15.2 |
|
11.0 |
|
7.1 |
|
47.0 |
|
1.9 |
|
- |
|
1.9 |
||||||||
| Total | $ |
147.7 |
$ |
152.4 |
$ |
132.0 |
$ |
133.7 |
$ |
565.8 |
$ |
142.4 |
$ |
145.7 |
$ |
288.1 |
||||||||
| Electronics | ||||||||||||||||||||||||
| Organic | $ |
65.5 |
$ |
74.0 |
$ |
67.1 |
$ |
57.4 |
$ |
264.0 |
$ |
67.6 |
$ |
73.0 |
$ |
140.7 |
||||||||
| Acquisition |
|
- |
|
1.2 |
|
2.3 |
|
2.3 |
|
5.8 |
|
2.0 |
|
1.2 |
|
3.1 |
||||||||
| Total | $ |
65.5 |
$ |
75.2 |
$ |
69.4 |
$ |
59.7 |
$ |
269.8 |
$ |
69.6 |
$ |
74.2 |
$ |
143.8 |
||||||||
| Consolidated | ||||||||||||||||||||||||
| Organic | $ |
199.5 |
$ |
211.2 |
$ |
188.1 |
$ |
184.0 |
$ |
782.8 |
$ |
208.1 |
$ |
218.7 |
$ |
426.8 |
||||||||
| Acquisition |
|
13.7 |
|
16.4 |
|
13.3 |
|
9.4 |
|
52.8 |
|
3.9 |
|
1.2 |
|
5.0 |
||||||||
| Total | $ |
213.2 |
$ |
227.6 |
$ |
201.4 |
$ |
193.4 |
$ |
835.6 |
$ |
212.0 |
$ |
219.9 |
$ |
431.9 |
||||||||
1 Net Sales is considered to be acquisition related until the acquisition has been included in the Company’s financial results for one full year. |
HELIOS TECHNOLOGIES Net Sales by Geographic Region and Segment (In millions) (Unaudited) |
|||||||||||||||
| Q1 | % Change y/y | Q2 | % Change y/y | YTD 2024 | % Change y/y | ||||||||||
| Hydraulics | $ |
55.8 |
|
(4 |
%) |
$ |
59.5 |
|
(2 |
%) |
$ |
115.3 |
|
(3 |
%) |
| Electronics |
|
58.1 |
|
5 |
% |
$ |
57.8 |
|
(9 |
%) |
|
115.9 |
|
(2 |
%) |
| Consol. |
|
113.9 |
|
1 |
% |
|
117.3 |
|
(5 |
%) |
|
231.2 |
|
(2 |
%) |
| % of total |
|
54 |
% |
|
53 |
% |
|
54 |
% |
||||||
| EMEA: | |||||||||||||||
| Hydraulics | $ |
45.5 |
|
(8 |
%) |
$ |
42.8 |
|
(17 |
%) |
$ |
88.3 |
|
(12 |
%) |
| Electronics |
|
6.5 |
|
(3 |
%) |
|
9.0 |
|
29 |
% |
|
15.5 |
|
13 |
% |
| Consol. EMEA |
|
52.0 |
|
(7 |
%) |
|
51.8 |
|
(11 |
%) |
|
103.8 |
|
(9 |
%) |
| % of total |
|
25 |
% |
|
24 |
% |
|
24 |
% |
||||||
| APAC: | |||||||||||||||
| Hydraulics | $ |
41.1 |
|
2 |
% |
$ |
43.4 |
|
7 |
% |
$ |
84.5 |
|
4 |
% |
| Electronics |
|
5.0 |
|
35 |
% |
|
7.4 |
|
48 |
% |
|
12.4 |
|
43 |
% |
| Consol. APAC |
|
46.1 |
|
5 |
% |
|
50.8 |
|
12 |
% |
|
96.9 |
|
8 |
% |
| % of total |
|
22 |
% |
|
23 |
% |
|
22 |
% |
||||||
| Total | $ |
212.0 |
|
(1 |
%) |
$ |
219.9 |
|
(3 |
%) |
$ |
431.9 |
|
(2 |
%) |
2023 |
|||||||||||||||||||||||||
| Q1 | % Change y/y | Q2 | % Change y/y | Q3 | % Change y/y | Q4 | % Change y/y |
|
2023 |
|
% Change y/y | ||||||||||||||
| Hydraulics | $ |
57.9 |
|
34 |
% |
$ |
60.6 |
|
21 |
% |
$ |
55.7 |
|
12 |
% |
$ |
60.2 |
|
6 |
% |
$ |
234.4 |
|
17 |
% |
| Electronics |
|
55.1 |
|
(29 |
%) |
|
63.2 |
|
(21 |
%) |
|
59.4 |
|
(9 |
%) |
|
48.8 |
|
2 |
% |
$ |
226.5 |
|
(16 |
%) |
| Consol. |
|
113.0 |
|
(6 |
%) |
|
123.8 |
|
(5 |
%) |
|
115.1 |
|
0 |
% |
|
109.0 |
|
4 |
% |
|
460.9 |
|
(2 |
%) |
| % of total |
|
53 |
% |
|
54 |
% |
|
57 |
% |
|
56 |
% |
|
55 |
% |
||||||||||
| EMEA: | |||||||||||||||||||||||||
| Hydraulics | $ |
49.4 |
|
(7 |
%) |
$ |
51.3 |
|
5 |
% |
$ |
38.8 |
|
(6 |
%) |
$ |
38.1 |
|
(12 |
%) |
$ |
177.6 |
|
(5 |
%) |
| Electronics |
|
6.7 |
|
(43 |
%) |
|
7.0 |
|
(43 |
%) |
|
5.7 |
|
(26 |
%) |
|
5.8 |
|
9 |
% |
$ |
25.2 |
|
(32 |
%) |
| Consol. EMEA |
|
56.1 |
|
(13 |
%) |
|
58.3 |
|
(5 |
%) |
|
44.5 |
|
(9 |
%) |
|
43.9 |
|
(10 |
%) |
|
202.8 |
|
(9 |
%) |
| % of total |
|
26 |
% |
|
26 |
% |
|
22 |
% |
|
23 |
% |
|
24 |
% |
||||||||||
| APAC: | |||||||||||||||||||||||||
| Hydraulics | $ |
40.4 |
|
(2 |
%) |
$ |
40.5 |
|
(8 |
%) |
$ |
37.5 |
|
(7 |
%) |
$ |
35.4 |
|
(12 |
%) |
$ |
153.8 |
|
(7 |
%) |
| Electronics |
|
3.7 |
|
(73 |
%) |
|
5.0 |
|
(22 |
%) |
|
4.3 |
|
30 |
% |
|
5.1 |
|
104 |
% |
$ |
18.1 |
|
(31 |
%) |
| Consol. APAC |
|
44.1 |
|
(20 |
%) |
|
45.5 |
|
(10 |
%) |
|
41.8 |
|
(4 |
%) |
|
40.5 |
|
(5 |
%) |
|
171.9 |
|
(10 |
%) |
| % of total |
|
21 |
% |
|
20 |
% |
|
21 |
% |
|
21 |
% |
|
21 |
% |
||||||||||
| Total | $ |
213.2 |
|
(11 |
%) |
$ |
227.6 |
|
(6 |
%) |
$ |
201.4 |
|
(3 |
%) |
$ |
193.4 |
|
(1 |
%) |
$ |
835.6 |
|
(6 |
%) |
HELIOS TECHNOLOGIES Non-GAAP Adjusted Operating Income & Non-GAAP Adjusted Operating Margin RECONCILIATION (In millions) (Unaudited) |
|||||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| June 29, 2024 | Margin | July 1, 2023 | Margin | June 29, 2024 | Margin | July 1, 2023 | Margin | June 29, 2024 | Margin | ||||||||||||||||||||
| GAAP operating income | $ |
26.0 |
|
11.8 |
% |
$ |
29.5 |
|
13.0 |
% |
$ |
46.4 |
|
10.7 |
% |
$ |
54.3 |
|
12.3 |
% |
$ |
72.0 |
|
8.7 |
% |
||||
| Acquisition-related amortization of intangible assets |
|
7.9 |
|
3.6 |
% |
|
8.3 |
|
3.6 |
% |
|
15.7 |
|
3.6 |
% |
|
16.4 |
|
3.7 |
% |
|
32.2 |
|
3.9 |
% |
||||
| Acquisition and financing-related expenses(A) |
|
0.1 |
|
0.0 |
% |
|
1.1 |
|
0.5 |
% |
|
0.6 |
|
0.1 |
% |
|
2.8 |
|
0.6 |
% |
|
1.8 |
|
0.2 |
% |
||||
| Restructuring charges(B) |
|
1.7 |
|
0.8 |
% |
|
3.1 |
|
1.4 |
% |
|
3.2 |
|
0.7 |
% |
|
4.3 |
|
1.0 |
% |
|
10.9 |
|
1.3 |
% |
||||
| Officer transition costs |
|
0.3 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|
0.5 |
|
0.1 |
% |
|
0.8 |
|
0.2 |
% |
|
1.0 |
|
0.1 |
% |
||||
| Acquisition integration costs (C) |
|
- |
|
0.0 |
% |
|
0.1 |
|
0.0 |
% |
|
0.3 |
|
0.1 |
% |
|
0.2 |
|
0.0 |
% |
|
0.4 |
|
0.0 |
% |
||||
| Other |
|
- |
|
0.0 |
% |
|
- |
|
0.0 |
% |
|
- |
|
0.0 |
% |
|
(0.1 |
) |
0.0 |
% |
|
0.3 |
|
0.0 |
% |
||||
| Non-GAAP adjusted operating income | $ |
36.0 |
|
16.4 |
% |
$ |
42.1 |
|
18.5 |
% |
$ |
66.7 |
|
15.4 |
% |
$ |
78.7 |
|
17.9 |
% |
$ |
118.6 |
|
14.3 |
% |
||||
| GAAP operating margin |
|
11.8 |
% |
|
13.0 |
% |
|
10.7 |
% |
|
12.3 |
% |
|
8.7 |
% |
||||||||||||||
| Non-GAAP adjusted operating margin |
|
16.4 |
% |
|
18.5 |
% |
|
15.4 |
% |
|
17.9 |
% |
|
14.3 |
% |
||||||||||||||
| Net sales | $ |
219.9 |
|
$ |
227.6 |
|
$ |
431.9 |
|
$ |
440.8 |
|
$ |
826.7 |
|
||||||||||||||
Non-GAAP Adjusted EBITDA & Non-GAAP Adjusted EBITDA Margin RECONCILIATION (In millions) (Unaudited) |
|||||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| June 29, 2024 | Margin | July 1, 2023 | Margin | June 29, 2024 | Margin | July 1, 2023 | Margin | June 29, 2024 | Margin | ||||||||||||||||||||
| Net income | $ |
13.6 |
|
6.2 |
% |
$ |
16.8 |
|
7.4 |
% |
$ |
22.7 |
|
5.3 |
% |
$ |
30.6 |
|
6.9 |
% |
$ |
29.6 |
|
3.6 |
% |
||||
| Interest expense, net |
|
8.5 |
|
3.9 |
% |
|
7.8 |
|
3.4 |
% |
|
16.7 |
|
3.9 |
% |
|
14.0 |
|
3.2 |
% |
|
34.0 |
|
4.1 |
% |
||||
| Income tax provision |
|
4.0 |
|
1.8 |
% |
|
5.0 |
|
2.2 |
% |
|
6.8 |
|
1.6 |
% |
|
9.2 |
|
2.1 |
% |
|
9.3 |
|
1.1 |
% |
||||
| Depreciation and amortization |
|
16.0 |
|
7.3 |
% |
|
16.1 |
|
7.1 |
% |
|
31.7 |
|
7.3 |
% |
|
31.3 |
|
7.1 |
% |
|
64.2 |
|
7.8 |
% |
||||
| EBITDA |
|
42.1 |
|
19.1 |
% |
|
45.7 |
|
20.1 |
% |
|
77.9 |
|
18.0 |
% |
|
85.1 |
|
19.3 |
% |
|
137.1 |
|
16.6 |
% |
||||
| Acquisition and financing-related expenses(A) |
|
0.1 |
|
0.0 |
% |
|
1.1 |
|
0.5 |
% |
|
0.6 |
|
0.1 |
% |
|
2.8 |
|
0.6 |
% |
|
1.8 |
|
0.2 |
% |
||||
| Restructuring charges(B) |
|
1.7 |
|
0.8 |
% |
|
3.1 |
|
1.4 |
% |
|
3.2 |
|
0.7 |
% |
|
4.3 |
|
1.0 |
% |
|
10.9 |
|
1.3 |
% |
||||
| Officer transition costs |
|
0.3 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|
0.5 |
|
0.1 |
% |
|
0.8 |
|
0.2 |
% |
|
1.0 |
|
0.1 |
% |
||||
| Acquisition integration costs (C) |
|
- |
|
0.0 |
% |
|
0.1 |
|
0.0 |
% |
|
0.3 |
|
0.1 |
% |
|
0.2 |
|
0.0 |
% |
|
0.4 |
|
0.0 |
% |
||||
| Change in fair value of contingent consideration |
|
- |
|
0.0 |
% |
|
0.6 |
|
0.3 |
% |
|
- |
|
0.0 |
% |
|
0.7 |
|
0.2 |
% |
|
(0.9 |
) |
-0.1 |
% |
||||
| Other |
|
- |
|
0.0 |
% |
|
(0.5 |
) |
-0.2 |
% |
|
0.2 |
|
0.0 |
% |
|
(0.5 |
) |
-0.1 |
% |
|
0.4 |
|
0.0 |
% |
||||
| Adjusted EBITDA | $ |
44.2 |
|
20.1 |
% |
$ |
50.1 |
|
22.0 |
% |
$ |
82.7 |
|
19.1 |
% |
$ |
93.4 |
|
21.2 |
% |
$ |
150.7 |
|
18.2 |
% |
||||
| GAAP net income margin |
|
6.2 |
% |
|
7.4 |
% |
|
5.3 |
% |
|
6.9 |
% |
|
3.6 |
% |
||||||||||||||
| EBITDA margin |
|
19.1 |
% |
|
20.1 |
% |
|
18.0 |
% |
|
19.3 |
% |
|
16.6 |
% |
||||||||||||||
| Adjusted EBITDA margin |
|
20.1 |
% |
|
22.0 |
% |
|
19.1 |
% |
|
21.2 |
% |
|
18.2 |
% |
||||||||||||||
| Net sales | $ |
219.9 |
|
$ |
227.6 |
|
$ |
431.9 |
|
$ |
440.8 |
|
$ |
826.8 |
|
||||||||||||||
HELIOS TECHNOLOGIES Non-GAAP Adjusted Net Income & Non-GAAP Adjusted Net Income Per Diluted Share RECONCILIATION (In millions) (Unaudited) |
|||||||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||||||
| June 29, 2024 | Per Diluted Share | July 1, 2023 | Per Diluted Share | June 29, 2024 | Per Diluted Share* | July 1, 2023 | Per Diluted Share | ||||||||||||||||||||
| GAAP net income | $ |
13.6 |
|
$ |
0.41 |
|
$ |
16.8 |
|
$ |
0.51 |
|
$ |
22.7 |
|
$ |
0.68 |
|
$ |
30.6 |
|
$ |
0.93 |
|
|||
| Amortization of intangible assets(D) |
|
8.2 |
|
|
0.25 |
|
|
8.4 |
|
|
0.26 |
|
|
16.3 |
|
|
0.49 |
|
|
16.8 |
|
|
0.51 |
|
|||
| Acquisition and financing-related expenses(A) |
|
0.1 |
|
|
- |
|
|
1.1 |
|
|
0.03 |
|
|
0.6 |
|
|
0.02 |
|
|
2.8 |
|
|
0.09 |
|
|||
| Restructuring charges(B) |
|
1.7 |
|
|
0.05 |
|
|
3.1 |
|
|
0.09 |
|
|
3.2 |
|
|
0.10 |
|
|
4.3 |
|
|
0.13 |
|
|||
| Officer transition costs |
|
0.3 |
|
|
0.01 |
|
|
- |
|
|
- |
|
|
0.5 |
|
|
0.01 |
|
|
0.8 |
|
|
0.02 |
|
|||
| Acquisition integration costs (C) |
|
- |
|
|
- |
|
|
0.1 |
|
|
- |
|
|
0.3 |
|
|
0.01 |
|
|
0.2 |
|
|
0.01 |
|
|||
| Change in fair value of contingent consideration |
|
- |
|
|
- |
|
|
0.6 |
|
|
0.02 |
|
|
- |
|
|
- |
|
|
0.7 |
|
|
0.02 |
|
|||
| Other |
|
- |
|
|
- |
|
|
(0.5 |
) |
|
(0.02 |
) |
|
0.2 |
|
|
0.01 |
|
|
(0.5 |
) |
|
(0.02 |
) |
|||
| Tax effect of above |
|
(2.4 |
) |
|
(0.07 |
) |
|
(2.8 |
) |
|
(0.09 |
) |
|
(4.7 |
) |
|
(0.14 |
) |
|
(5.5 |
) |
|
(0.17 |
) |
|||
| Non-GAAP Adjusted net income | $ |
21.5 |
|
$ |
0.64 |
|
$ |
26.8 |
|
$ |
0.81 |
|
$ |
39.1 |
|
$ |
1.17 |
|
$ |
50.2 |
|
$ |
1.53 |
|
|||
| GAAP net income per diluted share | $ |
0.41 |
|
$ |
0.51 |
|
$ |
0.68 |
|
$ |
0.93 |
|
|||||||||||||||
| Non-GAAP Adjusted net income per diluted share | $ |
0.64 |
|
$ |
0.81 |
|
$ |
1.17 |
|
$ |
1.53 |
|
|||||||||||||||
(A) Acquisition and financing-related expenses include costs associated with our M&A activities. We believe these costs are not representative of the Company's operational performance and it is therefore more meaningful to analyze results with the costs excluded. For the three months and six months ended June 29, 2024, the charges include |
|
(B) Restructuring activities include activities within our Hydraulics segment related to the creation of our two new Regional Operational Centers of Excellence ("CoE") which are nearing completion with work expected to be completed in 2024. We also continue to add capabilities and activities to our recently expanded |
|
(C) Acquisition integration activities include costs associated with integrating our recently acquired businesses, which can occur up to 18 months after acquisition date. We believe these costs are not representative of the Company's operational performance and it is therefore more meaningful to analyze results with the costs excluded. For the three months ended and six months ended June 29, 2024, the costs totaled |
|
(D) Amortization of intangible assets presented here includes |
|
*General note: items may not foot or recalculate due to rounding |
HELIOS TECHNOLOGIES Non-GAAP Net Sales Growth RECONCILIATION (In millions) (Unaudited) |
|||||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||||||
| Hydraulics | Electronics | Consolidated | Hydraulics | Electronics | Consolidated | ||||||||||||||||||
| Q2 2024 Net Sales | $ |
145.7 |
|
$ |
74.2 |
|
$ |
219.9 |
|
$ |
288.1 |
|
$ |
143.8 |
|
$ |
431.9 |
|
|||||
| Impact of foreign currency translation(E) |
|
0.8 |
|
|
0.1 |
|
|
0.9 |
|
|
1.1 |
|
|
0.2 |
|
|
1.3 |
|
|||||
| Net Sales in constant currency |
|
146.5 |
|
|
74.3 |
|
|
220.8 |
|
|
289.2 |
|
|
144.0 |
|
|
433.2 |
|
|||||
| Less: Acquisition related sales |
|
- |
|
|
(1.2 |
) |
|
(1.2 |
) |
|
(1.9 |
) |
|
(3.1 |
) |
|
(5.0 |
) |
|||||
| Organic sales in constant currency | $ |
146.5 |
|
$ |
73.1 |
|
$ |
219.6 |
|
$ |
287.3 |
|
$ |
140.9 |
|
$ |
428.2 |
|
|||||
| Q2 2023 Net Sales | $ |
152.4 |
|
$ |
75.2 |
|
$ |
227.6 |
|
$ |
300.1 |
|
$ |
140.7 |
|
$ |
440.8 |
|
|||||
| Net sales growth |
|
-4 |
% |
|
-1 |
% |
|
-3 |
% |
|
-4 |
% |
|
2 |
% |
|
-2 |
% |
|||||
| Net sales growth in constant currency |
|
-4 |
% |
|
-1 |
% |
|
-3 |
% |
|
-4 |
% |
|
2 |
% |
|
-2 |
% |
|||||
| Organic net sales growth in constant currency |
|
-4 |
% |
|
-3 |
% |
|
-4 |
% |
|
-4 |
% |
|
0 |
% |
|
-3 |
% |
|||||
(E) The impact from foreign currency translation is calculated by translating current period activity at average prior period exchange rates. |
Net Debt-to-Adjusted EBITDA RECONCILIATION (In millions) (Unaudited) |
||
| As of | ||
| June 29, 2024 | ||
| Current portion of long-term non-revolving debt, net | 17.2 |
|
| Revolving lines of credit | 193.8 |
|
| Long-term non-revolving debt, net | 291.7 |
|
| Total debt | 502.7 |
|
| Less: Cash and cash equivalents | 45.0 |
|
| Net debt | 457.7 |
|
| TTM adjusted EBITDA | 150.7 |
|
3.0 |
||
Non-GAAP Financial Measures and Non-GAAP Forward-looking Financial Measures:
Adjusted operating income, adjusted operating margin, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, net debt-to-adjusted EBITDA, adjusted net income, adjusted net income per diluted share and sales in constant currency are not measures determined in accordance with generally accepted accounting principles in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240805956094/en/
Tania Almond
Vice President, Investor Relations and Corporate Communication
(941) 362-1333
tania.almond@HLIO.com
Deborah Pawlowski
Kei Advisors LLC
(716) 843-3908
dpawlowski@keiadvisors.com
Source: Helios Technologies, Inc.
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