Greetings, and welcome to the Helios Technologies First Quarter Fiscal Year 26 Financial Results Conference Call. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tania Almond, Vice President of Investor Relations and Corporate Communications. Thank you. You may begin.

Thank you, operator, and good day, everyone. Welcome to the Helios Technologies First Quarter 26 Financial Results Conference Call. We issued a press release announcing our results yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides there that accompany today's discussion as well as our prepared remarks. Joining me today are Sean Bagan, President and Chief Executive Officer, and Jeremy Evans, Executive Vice President and Chief Financial Officer. Sean will begin with highlights from the first quarter. Jeremy will then review our financial results in more detail and provide our outlook. Sean will return with some closing remarks and then we will open the call for questions. Before we get started, please turn to Slide 2 where you will find our Safe Harbor statement. As you may be aware, we will make some forward-looking statements during this presentation and the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from those presented today. These risks and uncertainties and other factors can be found in our annual report on Form 10-Ks for 2025 along with our upcoming 10-Q to be filed with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. I will also point out that during today's call, we will discuss some non-GAAP financial measures which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of comparable GAAP with non-GAAP measures in the tables that accompany today's slides. Please reference slides 3 through 5 as I now turn the call over to Sean.

Thanks, Tania, and welcome, everyone. We appreciate you joining us today. Anyone who watched this year's Kentucky Derby saw more than just a winner. They saw focused execution under pressure at exactly the right moment. Golden Tempo stayed focused, found his stride, and delivered when it mattered most. We believe our first quarter performance tells a similar story. Helios entered 2026 having done the hard work: sharpening our go-to-market model, strengthening our balance sheet, and building a team and culture aligned around the core 2030 strategy we introduced at our Investor Day. And like that Saturday race, the results for Helios this quarter were not just a headline moment. They were a collection of firsts and records: the highest quarterly sales ever for Innovation Controls, our largest electronics segment business; a record first quarter of cash generation for the company; and our first ever regular dividend increase of 33%. And perhaps one of the most telling measures of how far we have come, we reduced our net leverage by more than a full turn in just one year, bringing us to 1.6x net debt to adjusted EBITDA — the lowest level since 2018. The balance sheet position is not just a financial milestone; it is a strategic one, opening a meaningful level of optionality in how we deploy capital as we pursue the next leg of our growth. 2025 was our year of repositioning; 2026 is where that work finds its stride. As we came out of the starting gates, the 2030 financial targets — a plan built on 5% plus organic sales growth annually — our first quarter performance did not just meet that bar, it cleared it decisively, giving us early momentum against a five-year road map that we intend to run all the way through. The core strategy laid out a clear set of performance priorities to double our sales by 2030 and expand adjusted operating and EBITDA margins to 20% plus and 25% plus, respectively. The work we have done over the last 18 months to sharpen our go-to-market model, invest in innovation, and enhance operational excellence across our global footprint is an outcome of our momentum model, the engine behind this performance. Our first quarter results reflect the effectiveness of the Helios business system, as we are executing our organic sales growth plans and improving our margins year over year while we manage through a choppy geopolitical environment and invest for future growth. Let me summarize the first quarter. With a more robust demand environment than expected, total sales exceeded the high end of our outlook range, up 17% year over year to $228 million. On a pro forma basis, excluding the Custom Fluid Power (CFP) divestiture and the impact of foreign exchange, sales grew 23%, with both segments and all regions contributing to the increase. Our profitability measures kept improving, as higher sales volume drove significant year over year expansion in our margins. We continue to deeply engage with our existing and prospective customers, seeking out opportunities and leveraging our enhanced go-to-market model. Our teams from both Hydraulics and Electronics across our relevant major brands attended the CONEXPO trade show in the first quarter and showcased our latest products with a record level of show attendees present. Based on the level of booth activity and leads we extracted, we are seeing healthy activity across most of the markets we address. On a consolidated pro forma basis, we saw year over year growth across all the major end markets that we serve. With our balance sheet in excellent shape, our Board of Directors approved the aforementioned increase to the quarterly dividend in March. We continue to return capital to shareholders under our existing $100 million share repurchase authorization. These actions reflect our confidence in the long-term outlook and alignment with the value-creation framework we shared as part of the core strategy. With that, I will turn the call over to Jeremy to review the financial results in more detail. Jeremy?

Thank you, Sean, and good day, everyone. As I review our first quarter results, please refer to slides 6 through 8. First quarter sales were $228 million, up 17% compared with $195 million in the prior year period, and above the expectations we laid out on our fourth quarter call. Changes in foreign exchange had nearly a $6 million favorable impact on a year-over-year basis and contributed approximately $2 million to the overachievement of our Q1 outlook. As a reminder, we divested CFP at the end of September, so the first quarter comparison is more meaningful on a pro forma basis. Excluding the CFP sales in last year's first quarter and the foreign exchange impact, sales for the quarter were up 23% year over year. Higher sales and improved absorption drove gross profit up 25% in the quarter to $75 million and gross margin expanded 220 basis points year over year to 32.8%. In addition to higher volumes, margin expansion was driven by favorable segment mix, operational initiatives, and benefits from the CFP divestiture, partially offset by net tariff impacts and higher overhead expenses driven by equipment maintenance and energy costs. First quarter operating income rose 76% year over year to $30 million and operating margin expanded 440 basis points to 13.1%, demonstrating the operating leverage inherent in the business. On a non-GAAP basis, adjusted operating margin in the quarter was 16.7%, up 33 basis points year over year. Adjusted EBITDA margin was 20.4% in the first quarter, up 310 basis points over the prior year and the third consecutive quarter above 20%. Diluted EPS in the quarter was $0.59, up 168% compared with the prior year period. Diluted non-GAAP EPS of $0.80 rose 82%, exceeding the high end of our guidance range and a great start toward our expectation to deliver double-digit EPS growth for the second consecutive year. The upside reflects the realized sales growth, margin expansion, and solid operating performance. Turning to the segments, please refer to slide 9. Growth remained broad-based, driven by both segments and all regions. Hydraulic sales were up 10% and Electronics up 29%. On a pro forma basis and normalizing for the impact of foreign exchange, Hydraulics grew 19%. Regionally, we saw growth across the Americas and EMEA while APAC declined year over year as a result of the divestiture. On a pro forma basis, APAC grew over last year as well. Our business mix has shifted year over year to a greater weighting of Electronics not only from the CFP divestiture but also because our Electronics segment has been growing faster on a relative basis. By end market, Hydraulics saw strength in mobile, especially in the construction category, along with continued signs of recovery in agriculture, while we have seen channel inventories normalize. Our lead times have improved with operational challenges behind us, and we are capitalizing on this to win more business. We have a clear path identified to drive incremental sales across a number of adjacent markets we have not historically participated in. All of this gives us confidence in driving sustainable growth across our segments. Hydraulics gross profit in the quarter grew 18% year over year and gross margin expanded 220 basis points to 31.8% driven by better fixed cost leverage on higher volume, lower material costs, and the impact of the CFP divestiture. Segment SG&A expenses in the quarter increased approximately $1 million or 4% primarily reflecting investments in wages and benefits, as well as research and development, but improved as a percentage of sales. Segment operating income increased 34% to $23.4 million and operating margin expanded by 300 basis points. In Electronics, demand remained robust across recreational markets including persistent strength with a large OEM customer that has been a key contributor to recent volume outperformance. While there are still pockets of softness in certain consumer-exposed end markets, most notably marine, we are realizing growth with health and wellness, mobile, and industrial. Overall, the Electronics segment is performing extremely well on driving profitable sales growth. Electronics gross profit in the quarter was up 36% and gross margin expanded 170 basis points primarily driven by higher volumes and lower direct labor cost as a percentage of sales. SG&A expenses increased $2 million reflecting ongoing investment in engineering and research and development but improved as a percentage of sales. Segment operating income increased 78% to $14.2 million and operating margin expanded by 34 basis points. On slide 10, we generated $24 million of cash from operations and $17 million of free cash flow, both records for our first quarter. It is well worth noting that we have been able to effectively manage our working capital as we have adapted to growth, achieving a 25-day year-over-year improvement in our cash conversion cycle. Flipping to slide 11, you will see we used this cash to further strengthen the balance sheet as we continue to pay down debt, bringing our net debt to adjusted EBITDA leverage ratio down to 1.6 times at quarter end, compared with 2.7x in the prior year period. The lower debt level along with a lower spread on our credit facility borrowings due to reduced leverage resulted in $2 million of interest expense savings in the first quarter compared to the prior year. Total liquidity continues to exceed total debt giving us ample flexibility to fund organic growth investments and return capital to shareholders, while preserving dry powder for strategic M&A consistent with the core strategy we shared during our Investor Day. As mentioned, we extended our history of paying cash dividends to 117 consecutive quarters, highlighted by a 33% increase to $0.12 per share. We also deployed nearly $5 million on share repurchases during the quarter, leaving approximately $82 million remaining on our share repurchase authorization. Slide 12 reflects the 2026 financial priorities that we established. We started the year with solid execution against each priority as confirmed by our first quarter results. We remain focused on disciplined operational execution and investing in high-return opportunities, positioning Helios for earnings growth and long-term value creation. Turning to slides 13 and 14, based on our strong first quarter performance and improved visibility into the second quarter, we are raising the full-year sales and earnings per share outlook. We now expect sales to be in the range of $840 million to $870 million for the year, compared with $839 million as reported in 2025 and $792 million on a pro forma basis. This implies 8% growth over 2025 on a pro forma basis at the midpoint driven primarily by volume growth in our core platforms and the ramping of recent commercial wins. At the segment level for the full year, we expect Hydraulic sales in the range of $520 million to $535 million, up approximately 7% at the midpoint on a pro forma basis. For Electronics, we expect sales in the range of $320 million to $335 million, up 10% at the midpoint. We continue to expect 2026 adjusted EBITDA margin to be in the range of 19.5% to 21% reflecting gross margin expansion, operating expense discipline, and the full-year benefit of our portfolio and footprint actions. We now expect diluted non-GAAP EPS in the range of $2.70 to $2.95 or 11% growth at the midpoint. For Q2 2026, we expect sales to be in the range of $227 million to $232 million, up 16% over last year's second quarter at the midpoint when taking the divestiture of CFP into consideration. At the segment level for the second quarter, we expect Hydraulics sales in the range of $141 million to $144 million, up approximately 13% at the midpoint on a pro forma basis. For Electronics, we expect sales in the range of $86 million to $88 million, up 21% at the midpoint. We expect consolidated adjusted EBITDA margin to be in the range of 20% to 21%, up 190 basis points at the midpoint, and diluted non-GAAP EPS of $0.78 to $0.83 per share, up 36% at the midpoint. As we originally guided 2026, we expect first-half growth rates to be stronger year over year compared to the second half, driven by the timing of end market recoveries and the ramp of certain commercial wins in 2025. We are also mindful of several second-half considerations to our full-year outlook including the uncertain tariff landscape, inflationary pressures on fuel cost, the impact of rising energy prices, shift cost dynamics, ongoing geopolitical tensions, and broader recovery of cyclical markets. We remain focused on executing the core strategy, positioning Helios for earnings growth and long-term value creation. With that, please turn to slide 15, and I will turn the call back to Sean for his closing remarks.

Thanks, Jeremy. As you have heard today, Helios is off to a strong start in 2026. We are delivering double-digit sales growth, expanding margins, and realizing strong cash generation. We are making progress on the initiatives that underpin the core strategy and have a balance sheet that enables us to make strategic organic investments and explore incremental acquisition opportunities. Thank you to the global Helios team for such a strong start out of the gate for the year. Our go-to-market engine is performing. We are converting a healthy funnel of opportunities into wins across both segments and across the regions where we compete. Our innovation road map is on track, with a robust pipeline of new products, including the all-new state-of-the-art QMEH cartridge valve with proprietary position sensor technology launched by Sun Hydraulics at CONEXPO; Faster's launch of a collection of new products designed to support thermal management systems within data centers; and our next generation of electronics platforms like the OpenView S70 display to provide advanced control and monitoring systems within data centers and other end markets. Our operational excellence efforts from footprint optimization in North America and Europe to productivity improvements across our facilities are all designed to support margin expansion toward the long-term targets we laid out at Investor Day. Most importantly, we have a high-performing global team that is executing with discipline, and a customer-centric culture that believes in the path we have laid out. The combination of a clear strategy, a stronger operating model, and a solid financial foundation has Helios positioned well to navigate a dynamic environment and to deliver sustainable growth, enhanced profitability, and compelling long-term value for our shareholders. We will stay focused on running our own race, settling into our accelerated pace, and keeping our sights set on the long-term targets we have established for ourselves. Thank you for your engagement and support. With that, operator, let's open the lines for Q&A, please.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from the line of Christopher Moore with CJS Securities. Please proceed with your question.

Hey, good morning, guys. Congrats on a great quarter. Thanks for taking a couple. So despite the continued success, it still does not look like you are necessarily operating in an environment where you are seeing exceptional broad strength across a lot of your markets. Maybe can you drill down a little further on how you would characterize demand overall at this point?

Good morning, Christopher. Thanks for the question. In terms of the demand environment, certainly we have continued to see our order trends pace favorably. A couple of talking points there in terms of year-over-year order demand: we have seen 12 consecutive months, including April, of double-digit order intake over the prior year. And secondly, when you look at our order backlog, that continues to grow and is up about double digits year over year as well. So our order trends are strong. When we look at the market performance, though, we would characterize it as choppy. We have four large businesses; if you go around the horn on those, with Sun Hydraulics really benefiting from the construction and infrastructure investments that are being made and a lot of the OEM equipment that our products go into through our distribution channels. That is very strong. In addition, we really look at the channel inventory levels of our distribution partners, and they are at healthy levels, down to levels where we would envision more reordering patterns. On the ag side at Faster, where they are predominantly indexed to, it is really a story of geographic impacts where Europe and Asia are stronger, and the U.S. continues to be a challenged market here in the Americas. We have done a nice job to diversify that business into more construction and also recently announced our entry into thermal management for data centers. So we see some green-shoot opportunities there as well. On the electronic side, the Balboa business for that health and wellness market continues to be a low-single-digit growth market. It has effectively recovered from the gyrations from what happened with COVID — the uptick during COVID and then the downturn. We are back consistently growing that business. We have seen a shift there as well where Asia is particularly strong and Faster is a little lighter here in the Americas, and that is just due to where the OEMs are choosing to make the end equipment. As the lead supplier, we are agnostic to where the spas get built because we will fulfill and chase that in whichever geography it is. And then finally, with Innovation Controls, very diversified. As we highlighted in the prepared remarks, it was a record quarter for Innovation, so we are really thrilled about the trajectory there in the marketplace. It is mixed. The biggest part of the Innovation business has historically been recreational, which is also off-road product and marine. Marine still remains very challenged. Recreational is stabilized as dealer channel inventories have been stable for a period and we are starting to see some growth. The off-highway continues to increase there, but our business is really indexed to the U.S. Generally, we feel really good about the large growth we are getting out of that business and that is very helpful. I appreciate that.

And maybe just a follow-up. Coming into the quarter, consensus adjusted EPS roughly was really the same level for Q3 and Q4. Based on the strong Q1 and the Q2 guide, and overall 2026 guide, how are you thinking about the back half relative to what was in consensus coming into the quarter?

Yeah, Christopher, this is Jeremy. As you noted, when we did the initial guide for the year we said we expected the second-half growth to be a little bit less than what we see in the first half. Part of that is due to the timing of some of the customer wins that we had last year as well as some of the markets that we saw starting to return. We get really good visibility into the next 12 weeks or so on the order book, especially on the distribution side; as you start getting out further than that, it is a little bit less clear. But, based on the good Q1 and how we are guiding Q2 — which we would expect to be similar to Q1 — we did raise the outlook and are expecting to have a little bit stronger year than we did originally. When we look at the EPS specifically, I think we would see it a little bit higher in the third quarter and relatively similar in the fourth quarter as well.

Then Christopher, can I just add to that a little bit? It is important to point out that if you consider this year and then look at a five-year period, four of those five years our first half has been bigger than the back half. It is generally 53% to 54% in the first half and 46% to 47% in the back half. Last year, 2025, the back half was really strong — the only year out of those five where the back half was larger. We look at this on a two-year growth basis. If you do the math on our implied guidance, particularly at the high end of our guide, the back half would actually accelerate on a two-year basis from a growth rate perspective. One thing to highlight is about a quarter of our business is in the EMEA region and that July-August period is generally seasonally a little lower, so that is one of the items at play. We have been mindful and cautious about seeing further growth develop in the back half, but we are thrilled to get ahead of plan and raise our guide. Q2 is typically our largest quarter for orders, so as we pace throughout the quarter we will get better visibility into that back half because we are fairly short cycle in terms of our order trends. We feel really good about the momentum, and as I highlighted, 12 consecutive months of double-digit order intake, including April. If that continues, we will continue to chase our numbers up.

That makes perfect sense. Thanks, guys. I will jump back in line.

Thanks, Christopher. Our next question comes from the line of Jeffrey Hammond with KeyBanc. Please proceed with your question.

Hey, good morning, everyone. This is David Tarantino on for Jeffrey. I just want to follow up on that last point acknowledging that the backdrop you described is choppy and back-half comps are tougher. Could you give us some perspective on what the implied second-half outlook embeds relative to the underlying demand trends you are seeing today and what customers are telling you? Is the second-half moderation more about being conservative given limited visibility, or should we be thinking about end-market specific factors?

I would anchor back to the prior year and strip CFP out of those numbers since that was roughly a $60 million run-rate business, with about $45 million of revenue in the 2025 period. When you look at last year's back half excluding CFP, we reported plus 21% in the back half. Carrying that forward into this year, we think at the low end there could be some contraction, but at the high end we could see growth. That is taking Q1 actuals and our Q2 implied guide into the back half. On a two-year trend, at the high end of the $870 million full-year guide, it would show acceleration on the back half — plus 15% in the first half and plus 20% in the back half. Some variability comes from agriculture and what that recovery looks like. We are encouraged by recent releases from the large ag OEMs — AGCO, CNH, and DEERE. We are a supplier to those OEMs and tend to feel changes in our order book earlier. We are also looking at the announced entry into the thermal management business with Faster, which we are confident will start ramping in the back half; we have not recognized revenue yet from that. Other recent product launches like QMEH and the new displays are incremental and not cannibalizing existing sales. Our execution internally is at a high level right now and we need to continue that with our product launches, which we expect to be robust in the back half.

To add to the new product piece, we did talk about new wins in 2025. We projected around $60 million in new business wins to be phased in over time, and a lot of that has second-half potential in terms of timing and getting orders for those. We continue to put out press releases on new products and are excited about our product roadmap.

Okay, great. That is helpful. Maybe turning to margins, you highlighted a number of cost headwinds in the prepared remarks that do not seem apparent in the margins yet. Can you walk us through the puts and takes on the margin guide, particularly around price and cost? Any incremental tariff impacts and what you are doing to offset these headwinds?

This is Jeremy. As we said at our Investor Day and you can see in our results, one of the biggest movers on our margin is just the volumes. As we get leverage through our footprint you can see that ramp, as we saw here in Q1 with year-over-year improvement. In the guide at the midpoint for the full year, sales would be a bit lower in the back half, however we are still committed to improving our margins. Our intent is to improve margins roughly 100 basis points per year as we go toward our long-term 2030 targets. Regarding inflationary pressures and tariffs, we have done a fairly good job of mitigating tariffs. We talked about moving production into our region-for-region strategy. We have looked at sourcing products from alternate suppliers and been fairly successful with that. We have also taken pricing actions where necessary. From a dollar perspective, we are recovering tariff costs rather than trying to profit on them, and that affects margin percentage. We communicated last year tariff impacts in the second half were roughly $8 million, so on a full run-rate basis it would be a little higher. The current tariff situation is fluid and subject to change; for example, if the IEPA ruling holds, the tariff impact would be less than that, but there is uncertainty.

Outside of tariffs, two cost areas where we see inflationary pressure are freight with fuel surcharges and rising energy costs, particularly in Europe. We offset those through pricing actions when appropriate, region-for-region sourcing, and other operational levers. Our pricing strategy over the last 12 months has been to recover cost. We remain targeted at about 100 basis points of adjusted EBITDA margin expansion per year. 2025 demonstrated we can contend with volatility and still control margins. As implied in our guidance, we have held our full-year adjusted EBITDA range at 19.5% to 21% while raising the top line. We try to protect on the downside for unforeseen items, but we strive to hit the top end of our guidance. If we hit the top end, we would drive about 180 basis points of adjusted EBITDA margin expansion year over year, which would be a great result. The main takeaway is the starting assumptions haven't changed materially since the beginning of the year; we just had a strong start and feel good about momentum.

Great. Thanks.

Our next question comes from the line of Mircea Dobre with Baird. Please proceed with your question.

Hey, good morning, guys. This is Joseph Grabowski on for Mircea this morning. So just building on the last two sets of questions: your sales in the first quarter were $228 million and expected to be up a little bit sequentially. Those would be the two strongest quarters in several years, even taking into account the divestiture which reduced sales by about $15 million or so a quarter. When you think about this current level of sales, how do you parse it out between recovering end markets and what you guys are doing internally in terms of new product launches, new customers, new end markets, and so forth?

Thanks, Joe. I am glad you picked up on the comparable once you take out CFP — the first quarter was one of our highest quarters ever of sales, and our Q2 guide indicates it will look very similar. In terms of where we see the growth coming from, we saw strong activity at CONEXPO: booth activity, excitement, and new products on display. That is clearly a backdrop for our growth. We need to continue executing on product launches to support it. Our refined go-to-market model over the last 18 months is driving a lot of this in how we interface with customers, target new customers in adjacent spaces, and drive business discussions. The end markets are not uniformly strong; some are very strong, like construction in the U.S. and Asia, while others like ag are mixed by geography. Balboa Health and Wellness is expected to be low-single-digit growth but we believe we can take share and outpace that with win-back strategies and our product pipeline. Innovation has continued to significantly outpace growth for multiple quarters, including a record quarter here, and that aligns with their go-to-market initiatives. Many of our markets are cyclical, so if we get market help we can be in the mid to upper range of our guidance.

And maybe a quick follow-up: you touched on the tariff landscape, but can you drill down a little on what has changed in your tariff outlook versus when you announced Q4, and any strategy you can give as far as refunds or managing tariff exposure?

Yes, Joe. The topic of the IEPA refunds is at the forefront for many companies. We are monitoring that situation closely and will pursue refunds, although it is not extremely clear yet how that process will play out or when any amounts would be collected. That is not included in our guidance at this point. To manage tariffs, we continue to do what we have done historically: make products USMCA-compliant where appropriate, follow our region-for-region production strategy, and work with suppliers. As a last resort, we take pricing actions. We will pursue refunds if available but we are not factoring them into guidance until the path to collection is more certain. To put this in perspective, if you anchor back to the August impact last year, a little more than half of that was related to the IEPA refunds, so it is not a huge number for us either, and there is uncertainty around what would be paid and when.

Thanks. Our next question comes from the line of Tomo Sano with JPMorgan. Please proceed with your question.

Hi, good morning, everyone. You highlighted strong recreational demand in Electronics supported by a large OEM. For Q2 and the fiscal year, is the base case that it holds, normalizes, or decelerates, and what is driving that view, please?

Within the Innovation business, they have focused on go-to-market strategy and new product. We are rolling out our next generation displays; the OpenView platform is built on the CODESYS programming language which empowers customers to do some of their own engineering on displays and applications. We have seen wins with the large OEM you referenced, but there are others. It is a diversified customer base and we have a funnel of opportunities with the potential to win more business. Our outlook for the rest of the year includes the impact from expected new wins as well as changes to order trends and OEM forecasts. As of now those forecasts have not changed materially since we set the annual guide. Innovation is also diversifying into industrial and mobile and has a product sold into the data center environment, so it is not just recreational where we see opportunities.

And on a company-wide level, outside of the demand environment, what incremental drivers do you expect from go-to-market initiatives into Q2 and the back half — new wins, program ramps, cross-sell channel expansions — anything you would highlight for the rest of the year?

It starts with product. Many of the product announcements were made last year and our new product introduction processes prioritize products and accountability. Our product offering is competitive with leading positions in chosen markets, and our goal is to expand into targeted end markets where we can be a better partner for customers. On Electronics, offering additional components that pair with a display or controller supports cross-sell. On Hydraulics, our distribution channel has strong distributors that we are augmenting with targeted account planning to close more sales with engineering support. Cross-selling and sharing customer lists across brands allows us to engage more deeply and drive wins. We believe our end markets provide an opportunity to recover and outpace growth, and this year could be a record year for Helios at the high end when taking out the $60 million of CFP revenue that was divested.

Some specifics on ramps: we referenced a casting block product out of the Faster group that had a lot of interest at CONEXPO, and within Innovation we are rolling out next-generation displays with opportunities there. Sun Hydraulics is launching a QMEH valve with a flow sensor and a zero-series counterbalance valve. Part of the upside is adoption of these new products and the timing of order ramps. We are starting to see early wins for those that could be upside.

Our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question.

Good morning, everyone. Thanks for taking my question. During Investor Day, you talked about about $500 million of acquisition revenue. Can you update us on the acquisition pipeline a little bit? What opportunities are you seeing in the market? Also, any update on the supply chain — are there any sourcing concerns or electronic chip pressures we should consider?

Yes, Andres. At Investor Day we set a goal to double sales and noted that M&A will be part of that path. We estimated $500 million, which is in line with what we have done historically. The more we grow organically, the less M&A we would need, but we believe the $500 million is achievable. We are going about it in a more disciplined manner and are still early in the process. Our 2026 capital allocation priorities include investing in the business — we will invest in data center capabilities with Faster and in automation and replacing old equipment. We guided CapEx a bit higher for 2026 and remain committed to returning capital to shareholders, as evidenced by our dividend increase. We are developing the M&A framework, identifying white spaces and adjacent markets to target, and building the pipeline, but there is nothing imminent at this point. On the supply chain, we do not see material concerns at this time. There was a lot of focus on chips and constrained demand previously; we did see some pricing on those chips increase, but the teams secured supply and we feel covered. We do not see that as a material risk at this point.

Thank you. We have no further questions at this time. Ms. Almond, I would like to turn the floor back to you for closing comments.

Thank you, operator, and thank you, everyone, for joining us today. We will be out on the road attending some upcoming investor conferences, so we look forward to seeing many of you in person. Feel free to reach out to me as well if you have any follow-up questions. We look forward to talking to you soon. Have a great day.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.