HLIO 8-K
Helios Technologies, Inc. (HLIO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On August 7, 2023, Helios Technologies (the “Company”), issued the press release attached hereto as Exhibit 99.1 announcing its financial results for the second fiscal quarter of 2023.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Press release dated August 7, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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HELIOS TECHNOLOGIES, INC. |
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Date: |
August 7, 2023 |
By: |
/s/ Tricia L. Fulton |
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Tricia L. Fulton |
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Exhibit 99.1 |
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NEWS RELEASE |
FOR IMMEDIATE RELEASE
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023 with Revenue Up 7% and Net Income Up 21%
SARASOTA, FL, August 7, 2023 — Helios Technologies, Inc. (NYSE: HLIO) (“Helios” or the “Company”), a global leader in highly engineered motion control and electronic controls technology for diverse end markets, today reported financial results for the second quarter ended July 1, 2023. Results include our most recent flywheel acquisitions including Schultes Precision Manufacturing, Inc. (or “Schultes”), which was acquired on January 27, 2023, and i3 Product Development, Inc. (or “i3”), which was acquired on May 26, 2023.
“Over the last three years, we have methodically invested in change, and it is exciting to see the progress we have made,” said Helios’ President and Chief Executive Officer Josef Matosevic. “Our businesses are working cohesively to drive best-in-class product development providing the innovation our customers require for success. Expanding our capabilities enables us to better serve a more diversified global market. Our results in the quarter and year-to-date demonstrate this progress even against headwinds of the macroenvironment.”
“Our revolutionary technology, products and solutions allow the Company to be well-positioned to address the advancing megatrends of increased electrification, reduced emissions footprint, higher energy efficiency, and convenient user interface for applications that range from heavy-duty construction machines to off-road vehicles, cold-plunge baths, and commercial kitchen equipment. To serve this growing demand, we are pulling forward investments in manufacturing and capacity and will be adjusting our near-term expectations to accommodate for the related disruption to operations. Additionally, there is reduced visibility for the remainder of the year resulting from the lackluster economic situation in Asia Pacific and impacts from a fire and tornado at the Faster facility,” Matosevic concluded.
Helios Technologies | 7456 16th St East | Sarasota, FL 34243 | 941-362-1200
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 2 of 15 |
Second Quarter 2023 Consolidated Results
($ in millions, except per share data) |
Q2 2023 |
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Q2 2022 |
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Change |
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% Change |
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Net sales |
$ |
227.6 |
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$ |
241.7 |
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$ |
(14.1 |
) |
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(6 |
%) |
Gross profit |
$ |
75.8 |
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$ |
82.3 |
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$ |
(6.5 |
) |
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(8 |
%) |
Gross margin |
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33.3 |
% |
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34.1 |
% |
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(80 |
) |
bps |
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Operating income |
$ |
29.5 |
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$ |
43.0 |
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$ |
(13.5 |
) |
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(31 |
%) |
Operating margin |
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13.0 |
% |
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17.8 |
% |
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(480 |
) |
bps |
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Non-GAAP adjusted operating margin* |
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18.5 |
% |
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22.0 |
% |
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(350 |
) |
bps |
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Net income |
$ |
16.8 |
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$ |
30.0 |
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$ |
(13.2 |
) |
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(44 |
%) |
Diluted EPS |
$ |
0.51 |
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$ |
0.92 |
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$ |
(0.41 |
) |
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(45 |
%) |
Non-GAAP cash net income* |
$ |
26.8 |
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$ |
38.3 |
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$ |
(11.5 |
) |
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(30 |
%) |
Diluted Non-GAAP cash EPS* |
$ |
0.81 |
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$ |
1.18 |
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$ |
(0.37 |
) |
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(31 |
%) |
Adjusted EBITDA* |
$ |
50.1 |
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$ |
59.0 |
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$ |
(8.9 |
) |
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(15 |
%) |
Adjusted EBITDA margin* |
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22.0 |
% |
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24.4 |
% |
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(240 |
) |
bps |
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* Adjusted numbers are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, 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. These Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for GAAP. Please carefully review the attached 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.
Sales
Profits and margins
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 3 of 15 |
Non-operating items
Net income, earnings per share (“EPS”), non-GAAP cash earnings per share and adjusted EBITDA
Hydraulics Segment Review
(Refer to sales by geographic region and segment data in accompanying tables)
($ in millions) |
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Hydraulics |
For the Three Months Ended |
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Q2 2023 |
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Q2 2022 |
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Change |
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% Change |
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Net Sales |
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Americas |
$ |
60.6 |
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$ |
49.9 |
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$ |
10.7 |
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21 |
% |
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EMEA |
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51.3 |
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49.0 |
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2.3 |
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5 |
% |
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APAC |
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40.5 |
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43.9 |
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(3.4 |
) |
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(8 |
%) |
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Total Segment Sales |
$ |
152.4 |
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$ |
142.8 |
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$ |
9.6 |
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7 |
% |
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Gross Profit |
$ |
49.7 |
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$ |
49.5 |
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$ |
0.2 |
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0 |
% |
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Gross Margin |
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32.6 |
% |
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34.7 |
% |
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(210 |
) |
bps |
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SEA Expenses |
$ |
22.7 |
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$ |
18.4 |
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$ |
4.3 |
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23 |
% |
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Operating Income |
$ |
27.0 |
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$ |
31.1 |
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$ |
(4.1 |
) |
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(13 |
%) |
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Operating Margin |
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17.7 |
% |
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21.8 |
% |
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(410 |
) |
bps |
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Second Quarter Hydraulics Segment Review
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 4 of 15 |
Electronics Segment Review
(Refer to sales by geographic region and segment data in accompanying tables)
($ in millions) |
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Electronics |
For the Three Months Ended |
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Q2 2023 |
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Q2 2022 |
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Change |
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% Change |
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Net Sales |
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Americas |
$ |
63.2 |
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$ |
80.2 |
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$ |
(17.0 |
) |
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(21 |
%) |
EMEA |
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7.0 |
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12.3 |
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(5.3 |
) |
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(43 |
%) |
APAC |
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5.0 |
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6.4 |
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(1.4 |
) |
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(22 |
%) |
Total Segment Sales |
$ |
75.2 |
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$ |
98.9 |
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$ |
(23.7 |
) |
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(24 |
%) |
Gross Profit |
$ |
26.1 |
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$ |
32.8 |
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$ |
(6.7 |
) |
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(20 |
%) |
Gross Margin |
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34.7 |
% |
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33.2 |
% |
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150 |
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bps |
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SEA Expenses |
$ |
14.1 |
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$ |
12.5 |
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$ |
1.6 |
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13 |
% |
Operating Income |
$ |
12.0 |
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$ |
20.3 |
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$ |
(8.3 |
) |
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(41 |
%) |
Operating Margin |
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16.0 |
% |
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20.5 |
% |
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(450 |
) |
bps |
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Second Quarter Electronics Segment Review
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 5 of 15 |
Balance Sheet and Cash Flow Review
Updated 2023 Outlook:
The following provides the Company’s expectations for 2023 as of August 7, 2023. This assumes constant currency, using quarter end rates, and that markets served are not further impacted by the global pandemic or the geo-political environment.
|
2020 Actual |
Previous |
Updated |
Implied 3-Year CAGR at 2023 range mid-point |
Consolidated revenue |
$523 million |
$910 - $940 million |
$880 - $900 million |
19% |
Net income |
$14 million |
$99 - $104 million |
$65 - $66 million |
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Adjusted EBITDA |
$121 million |
$214 - $226 million |
$187 - $196 million |
17% |
Adjusted EBITDA margin |
23.2% |
23.5% - 24.0% |
21.0% - 22.0% |
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Interest expense |
$13 million |
$23 - $24 million |
$30 - $32 million |
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Effective tax rate |
18% |
21% - 23% |
21% - 23% |
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Depreciation |
$18 million |
$27 - $29 million |
$31 - $33 million |
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Amortization |
$22 million |
$30 - $32 million |
$33 - $35 million |
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Capital expenditures % total revenue |
3% |
3% - 5% of sales |
3% - 5% of sales |
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Diluted EPS |
$0.44 |
$3.03 - $3.18 |
$1.96 - $2.00 |
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Diluted Non-GAAP Cash EPS |
$2.24 |
$3.95 - $4.10 |
$3.04 - $3.12 |
11% |
Adjusted EBITDA, Adjusted EBITDA margin and Diluted Non-GAAP Cash EPS represent non-GAAP financial measures. The Company has presented the comparable GAAP figures in the table above. For 2023 Outlook, Adjusted EBITDA excludes an estimated $8 million to $9 million of costs for restructuring activities and acquisition related costs including integration. For 2023 Outlook, Diluted non-GAAP Cash EPS excludes an estimated $1.08 to $1.12 per diluted share of costs primarily for amortization, restructuring activities, acquisition related costs including integration and the related tax impact on these items.
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 6 of 15 |
Webcast
The Company will host a conference call and webcast tomorrow, August 8, 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 15, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13739447. 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) the Company’s financing plans; (iv) trends affecting the Company’s financial condition or results of operations; (v) the Company’s ability to continue to control costs and to meet its liquidity and other financing needs; (vi) the declaration and payment of dividends; and (vii) the Company’s ability to respond to changes in customer demand domestically and internationally, including as a result of 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) supply chain disruption and the potential inability to procure goods; (ii) conditions in the capital markets, including the interest rate environment and the availability of capital; (iii) inflation (including hyperinflation) or recession; (iv) 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; (v) risks related to health epidemics, pandemics and similar outbreaks, including, without limitation, the current COVID-19 pandemic, particularly in China, 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; (vi) risks related to our international operations, including the potential impact of the ongoing conflict between Russia and Ukraine; and (vii) new product introductions, product sales mix and the geographic mix of sales nationally and internationally; (viii) our failure to realize the benefits expected from acquisitions, our failure to promptly and effectively integrate acquisitions and the ability of Helios to retain and hire key personnel, and maintain relationships with suppliers. Further information relating to factors that could cause actual results to differ from those anticipated is included but not limited to information under the heading Item 1. “Business” and
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 7 of 15 |
Item 1A. “Risk Factors” in the Company’s Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on February 28, 2023.
This news release will discuss some historical non-GAAP financial measures, which 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. 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 2023 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.
For more information, contact:
Tania Almond
Vice President, Investor Relations and Corporate Communication
(941) 362-1333
[email protected]
Deborah Pawlowski
Kei Advisors LLC
(716) 843-3908
[email protected]
Financial Tables Follow:
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 8 of 15 |
HELIOS TECHNOLOGIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
(Unaudited)
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For the Three Months Ended |
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For the Six Months Ended |
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July 1, 2023 |
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July 2, 2022 |
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% Change |
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July 1, 2023 |
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July 2, 2022 |
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% Change |
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Net sales |
$ |
227.6 |
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|
$ |
241.7 |
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(6 |
)% |
|
$ |
440.8 |
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$ |
482.2 |
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|
(9 |
)% |
Cost of sales |
|
151.8 |
|
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|
159.4 |
|
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(5 |
)% |
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|
294.0 |
|
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|
316.3 |
|
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|
(7 |
)% |
Gross profit |
|
75.8 |
|
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|
82.3 |
|
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(8 |
)% |
|
|
146.8 |
|
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|
166.0 |
|
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|
(12 |
)% |
Gross margin |
|
33.3 |
% |
|
|
34.1 |
% |
|
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|
33.3 |
% |
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34.4 |
% |
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Selling, engineering and administrative expenses |
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38.0 |
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|
32.5 |
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|
17 |
% |
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|
76.1 |
|
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|
66.3 |
|
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|
15 |
% |
Amortization of intangible assets |
|
8.3 |
|
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|
6.8 |
|
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|
22 |
% |
|
|
16.4 |
|
|
|
13.8 |
|
|
|
19 |
% |
Operating income |
|
29.5 |
|
|
|
43.0 |
|
|
|
(31 |
)% |
|
|
54.3 |
|
|
|
85.9 |
|
|
|
(37 |
)% |
Operating margin |
|
13.0 |
% |
|
|
17.8 |
% |
|
|
|
|
|
12.3 |
% |
|
|
17.8 |
% |
|
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||
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Interest expense, net |
|
7.8 |
|
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|
3.8 |
|
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|
105 |
% |
|
|
14.0 |
|
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|
7.6 |
|
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|
84 |
% |
Foreign currency transaction loss (gain), net |
|
0.1 |
|
|
|
(0.2 |
) |
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(150 |
)% |
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|
0.5 |
|
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(1.1 |
) |
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|
(145 |
)% |
Other non-operating (income) expense, net |
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(0.2 |
) |
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0.6 |
|
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(133 |
)% |
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|
- |
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1.3 |
|
|
|
(100 |
)% |
Income before income taxes |
|
21.8 |
|
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|
38.8 |
|
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|
(44 |
)% |
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|
39.8 |
|
|
|
78.0 |
|
|
|
(49 |
)% |
Income tax provision |
|
5.0 |
|
|
|
8.7 |
|
|
|
(43 |
)% |
|
|
9.2 |
|
|
|
17.5 |
|
|
|
(47 |
)% |
Net income |
$ |
16.8 |
|
|
$ |
30.0 |
|
|
|
(44 |
)% |
|
$ |
30.6 |
|
|
$ |
60.5 |
|
|
|
(49 |
)% |
|
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Net income per share: |
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||||||
Basic |
$ |
0.51 |
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|
$ |
0.92 |
|
|
|
(45 |
)% |
|
$ |
0.94 |
|
|
$ |
1.86 |
|
|
|
(49 |
)% |
Diluted |
$ |
0.51 |
|
|
$ |
0.92 |
|
|
|
(45 |
)% |
|
$ |
0.93 |
|
|
$ |
1.86 |
|
|
|
(50 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
32.8 |
|
|
|
32.5 |
|
|
|
|
|
|
32.7 |
|
|
|
32.5 |
|
|
|
|
||
Diluted |
|
32.9 |
|
|
|
32.5 |
|
|
|
|
|
|
32.8 |
|
|
|
32.6 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends declared per share |
$ |
0.09 |
|
|
$ |
0.09 |
|
|
|
|
|
$ |
0.18 |
|
|
$ |
0.18 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 9 of 15 |
HELIOS TECHNOLOGIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
|
July 1, 2023 |
|
|
December 31, 2022 |
|
||
|
(Unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
37.5 |
|
|
$ |
43.7 |
|
Accounts receivable, net of allowance for |
|
|
|
|
|
||
credit losses of $2.0 and $1.5 |
|
140.1 |
|
|
|
125.1 |
|
Inventories, net |
|
205.7 |
|
|
|
191.6 |
|
Income taxes receivable |
|
7.3 |
|
|
|
10.2 |
|
Other current assets |
|
22.4 |
|
|
|
17.9 |
|
Total current assets |
|
413.0 |
|
|
|
388.5 |
|
Property, plant and equipment, net |
|
217.9 |
|
|
|
175.7 |
|
Deferred income taxes |
|
2.1 |
|
|
|
1.6 |
|
Goodwill |
|
510.0 |
|
|
|
468.5 |
|
Other intangible assets, net |
|
441.8 |
|
|
|
405.6 |
|
Other assets |
|
25.9 |
|
|
|
23.8 |
|
Total assets |
$ |
1,610.7 |
|
|
$ |
1,463.7 |
|
Liabilities and shareholders’ equity |
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Accounts payable |
$ |
71.6 |
|
|
$ |
73.7 |
|
Accrued compensation and benefits |
|
21.8 |
|
|
|
21.1 |
|
Other accrued expenses and current liabilities |
|
22.7 |
|
|
|
32.0 |
|
Current portion of long-term non-revolving debt, net |
|
20.5 |
|
|
|
19.0 |
|
Dividends payable |
|
3.0 |
|
|
|
2.9 |
|
Income taxes payable |
|
6.4 |
|
|
|
3.6 |
|
Total current liabilities |
|
146.0 |
|
|
|
152.3 |
|
Revolving lines of credit |
|
218.9 |
|
|
|
261.3 |
|
Long-term non-revolving debt, net |
|
309.7 |
|
|
|
164.2 |
|
Deferred income taxes |
|
62.0 |
|
|
|
61.0 |
|
Other noncurrent liabilities |
|
26.6 |
|
|
|
30.0 |
|
Total liabilities |
|
763.2 |
|
|
|
668.8 |
|
Commitments and contingencies |
|
- |
|
|
|
- |
|
Shareholders’ equity: |
|
|
|
|
|
||
Preferred stock, par value $0.001, 2.0 shares authorized, |
|
|
|
|
|
||
no shares issued or outstanding |
|
- |
|
|
|
- |
|
Common stock, par value $0.001, 100.0 shares authorized, |
|
|
|
|
|
||
33.0 and 32.6 shares issued and outstanding |
|
- |
|
|
|
- |
|
Capital in excess of par value |
|
428.4 |
|
|
|
404.3 |
|
Retained earnings |
|
474.7 |
|
|
|
450.0 |
|
Accumulated other comprehensive loss |
|
(55.6 |
) |
|
|
(59.4 |
) |
Total shareholders’ equity |
|
847.5 |
|
|
|
794.9 |
|
Total liabilities and shareholders’ equity |
$ |
1,610.7 |
|
|
$ |
1,463.7 |
|
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 10 of 15 |
HELIOS TECHNOLOGIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
|
For the Six Months Ended |
|
|||||
|
July 1, 2023 |
|
|
July 2, 2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income |
$ |
30.6 |
|
|
$ |
60.5 |
|
Adjustments to reconcile net income to |
|
|
|
|
|
||
net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
31.3 |
|
|
|
25.0 |
|
Stock-based compensation expense |
|
6.5 |
|
|
|
4.4 |
|
Amortization of debt issuance costs |
|
0.3 |
|
|
|
0.2 |
|
Benefit for deferred income taxes |
|
(2.1 |
) |
|
|
(1.7 |
) |
Forward contract losses (gains), net |
|
0.4 |
|
|
|
(4.2 |
) |
Other, net |
|
0.4 |
|
|
|
1.3 |
|
(Increase) decrease in, net of acquisitions: |
|
|
|
|
|
||
Accounts receivable |
|
(8.5 |
) |
|
|
(20.0 |
) |
Inventories |
|
(9.6 |
) |
|
|
(17.9 |
) |
Income taxes receivable |
|
3.3 |
|
|
|
- |
|
Other current assets |
|
(4.9 |
) |
|
|
1.7 |
|
Other assets |
|
3.1 |
|
|
|
8.2 |
|
Increase (decrease) in, net of acquisitions: |
|
|
|
|
|
||
Accounts payable |
|
(3.5 |
) |
|
|
(6.4 |
) |
Accrued expenses and other liabilities |
|
(5.6 |
) |
|
|
(2.6 |
) |
Income taxes payable |
|
2.7 |
|
|
|
3.1 |
|
Other noncurrent liabilities |
|
(3.3 |
) |
|
|
(7.4 |
) |
Contingent consideration payments in excess acquisition date fair value |
|
(2.7 |
) |
|
|
- |
|
Net cash provided by operating activities |
|
38.4 |
|
|
|
44.2 |
|
Cash flows from investing activities: |
|
|
|
|
|
||
Business acquisitions, net of cash acquired |
|
(114.8 |
) |
|
|
1.3 |
|
Capital expenditures |
|
(19.6 |
) |
|
|
(13.5 |
) |
Proceeds from dispositions of property, plant and equipment |
|
0.2 |
|
|
|
1.9 |
|
Cash settlement of forward contracts |
|
0.4 |
|
|
|
2.6 |
|
Software development costs |
|
(2.0 |
) |
|
|
(1.5 |
) |
Net cash used in investing activities |
|
(135.8 |
) |
|
|
(9.2 |
) |
Cash flows from financing activities: |
|
|
|
|
|
||
Borrowings on revolving credit facilities |
|
142.7 |
|
|
|
39.2 |
|
Repayment of borrowings on revolving credit facilities |
|
(188.6 |
) |
|
|
(47.6 |
) |
Borrowings on long-term non-revolving debt |
|
160.0 |
|
|
|
- |
|
Repayment of borrowings on long-term non-revolving debt |
|
(12.3 |
) |
|
|
(8.5 |
) |
Proceeds from stock issued |
|
1.0 |
|
|
|
1.2 |
|
Dividends to shareholders |
|
(5.9 |
) |
|
|
(5.8 |
) |
Payment of employee tax withholding on equity award vestings |
|
(2.1 |
) |
|
|
(2.5 |
) |
Payment of contingent consideration liability |
|
(3.4 |
) |
|
|
- |
|
Other financing activities |
|
(1.3 |
) |
|
|
(0.8 |
) |
Net cash provided by (used in) financing activities |
|
90.1 |
|
|
|
(24.8 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
1.1 |
|
|
|
2.6 |
|
Net (decrease) increase in cash and cash equivalents |
|
(6.2 |
) |
|
|
12.8 |
|
Cash and cash equivalents, beginning of period |
|
43.7 |
|
|
|
28.6 |
|
Cash and cash equivalents, end of period |
$ |
37.5 |
|
|
$ |
41.4 |
|
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 11 of 15 |
HELIOS TECHNOLOGIES
SEGMENT DATA
(In millions)
(Unaudited)
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
||||||||||
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
||||
Hydraulics |
$ |
152.4 |
|
|
$ |
142.8 |
|
|
$ |
300.1 |
|
|
$ |
279.9 |
|
Electronics |
|
75.2 |
|
|
|
98.9 |
|
|
|
140.7 |
|
|
|
202.3 |
|
Consolidated |
$ |
227.6 |
|
|
$ |
241.7 |
|
|
$ |
440.8 |
|
|
$ |
482.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit and margin: |
|
|
|
|
|
|
|
|
|
|
|
||||
Hydraulics |
$ |
49.7 |
|
|
$ |
49.5 |
|
|
$ |
99.6 |
|
|
$ |
100.3 |
|
|
|
32.6 |
% |
|
|
34.7 |
% |
|
|
33.2 |
% |
|
|
35.8 |
% |
Electronics |
|
26.1 |
|
|
|
32.8 |
|
|
|
47.2 |
|
|
|
65.6 |
|
|
|
34.7 |
% |
|
|
33.2 |
% |
|
|
33.5 |
% |
|
|
32.4 |
% |
Consolidated |
$ |
75.8 |
|
|
$ |
82.3 |
|
|
$ |
146.8 |
|
|
$ |
166.0 |
|
|
|
33.3 |
% |
|
|
34.1 |
% |
|
|
33.3 |
% |
|
|
34.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) and margin: |
|
|
|
|
|
|
|
|
|
|
|
||||
Hydraulics |
$ |
27.0 |
|
|
$ |
31.1 |
|
|
$ |
55.0 |
|
|
$ |
62.7 |
|
|
|
17.7 |
% |
|
|
21.8 |
% |
|
|
18.3 |
% |
|
|
22.4 |
% |
Electronics |
|
12.0 |
|
|
|
20.3 |
|
|
|
19.5 |
|
|
|
40.8 |
|
|
|
16.0 |
% |
|
|
20.5 |
% |
|
|
13.9 |
% |
|
|
20.2 |
% |
Corporate and other |
|
(9.5 |
) |
|
|
(8.4 |
) |
|
|
(20.2 |
) |
|
|
(17.6 |
) |
Consolidated |
$ |
29.5 |
|
|
$ |
43.0 |
|
|
$ |
54.3 |
|
|
$ |
85.9 |
|
|
|
13.0 |
% |
|
|
17.8 |
% |
|
|
12.3 |
% |
|
|
17.8 |
% |
ORGANIC AND ACQUIRED REVENUE[1]
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
Full Year Ended |
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||||||||||||
|
April 2, |
|
|
July 2, |
|
|
October 1, |
|
|
December 31, |
|
|
December 31, |
|
|
April 1, |
|
July 1, |
|
|
July 1, |
|
||||||||
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2023 |
|
2023 |
|
|
2023 |
|
||||||||
Hydraulics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Organic |
$ |
130.7 |
|
|
$ |
137.1 |
|
|
$ |
129.1 |
|
|
$ |
132.0 |
|
|
$ |
528.9 |
|
|
$ |
134.0 |
|
$ |
137.2 |
|
|
$ |
271.2 |
|
Acquisition |
|
6.4 |
|
|
|
5.7 |
|
|
|
2.1 |
|
|
|
8.2 |
|
|
|
22.4 |
|
|
|
13.7 |
|
|
15.2 |
|
|
|
28.9 |
|
Total |
$ |
137.1 |
|
|
$ |
142.8 |
|
|
$ |
131.2 |
|
|
$ |
140.2 |
|
|
$ |
551.3 |
|
|
$ |
147.7 |
|
$ |
152.4 |
|
|
$ |
300.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Electronics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Organic |
$ |
102.7 |
|
|
$ |
97.9 |
|
|
$ |
75.2 |
|
|
$ |
55.8 |
|
|
$ |
331.6 |
|
|
$ |
65.5 |
|
$ |
74.0 |
|
|
$ |
139.5 |
|
Acquisition |
|
0.8 |
|
|
|
1.0 |
|
|
|
0.7 |
|
|
|
- |
|
|
|
2.5 |
|
|
|
- |
|
|
1.2 |
|
|
|
1.2 |
|
Total |
$ |
103.4 |
|
|
$ |
98.9 |
|
|
$ |
75.9 |
|
|
$ |
55.8 |
|
|
$ |
334.1 |
|
|
$ |
65.5 |
|
$ |
75.2 |
|
|
$ |
140.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Organic |
$ |
233.4 |
|
|
$ |
235.0 |
|
|
$ |
204.3 |
|
|
$ |
187.8 |
|
|
$ |
860.5 |
|
|
$ |
199.5 |
|
$ |
211.2 |
|
|
$ |
410.7 |
|
Acquisition |
|
7.2 |
|
|
|
6.6 |
|
|
|
2.9 |
|
|
|
8.2 |
|
|
|
24.9 |
|
|
|
13.7 |
|
|
16.4 |
|
|
|
30.1 |
|
Total |
$ |
240.5 |
|
|
$ |
241.7 |
|
|
$ |
207.2 |
|
|
$ |
196.0 |
|
|
$ |
885.4 |
|
|
$ |
213.2 |
|
$ |
227.6 |
|
|
$ |
440.8 |
|
[1] Revenue is considered to be acquisition related until the acquisition has been included in the Company’s financial results for one full year.
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 12 of 15 |
HELIOS TECHNOLOGIES
ADDITIONAL INFORMATION
(Unaudited)
2023 Sales by Geographic Region and Segment |
|
|
|
|
|
|
|
|
|
|||||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Q1 |
|
% Change y/y |
Q2 |
|
% Change y/y |
YTD 2023 |
|
% Change y/y |
|
|
|
|
|
|
|||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
57.9 |
|
34% |
$ |
60.6 |
|
21% |
$ |
118.5 |
|
27% |
|
|
|
|
|
|
||
Electronics |
|
55.1 |
|
(29%) |
|
63.2 |
|
(21%) |
|
118.3 |
|
(25%) |
|
|
|
|
|
|
||
Consol. Americas |
|
113.0 |
|
(6%) |
|
123.8 |
|
(5%) |
|
236.8 |
|
(6%) |
|
|
|
|
|
|
||
% of total |
|
53 |
% |
|
|
54 |
% |
|
|
54 |
% |
|
|
|
|
|
|
|
||
EMEA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
49.4 |
|
(7%) |
$ |
51.3 |
|
5% |
$ |
100.7 |
|
(1%) |
|
|
|
|
|
|
||
Electronics |
|
6.7 |
|
(43%) |
|
7.0 |
|
(43%) |
|
13.7 |
|
(43%) |
|
|
|
|
|
|
||
Consol. EMEA |
|
56.1 |
|
(13%) |
|
58.3 |
|
(5%) |
|
114.4 |
|
(9%) |
|
|
|
|
|
|
||
% of total |
|
26 |
% |
|
|
26 |
% |
|
|
26 |
% |
|
|
|
|
|
|
|
||
APAC: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
40.4 |
|
(2%) |
$ |
40.5 |
|
(8%) |
$ |
80.9 |
|
(5%) |
|
|
|
|
|
|
||
Electronics |
|
3.7 |
|
(73%) |
|
5.0 |
|
(22%) |
|
8.7 |
|
(57%) |
|
|
|
|
|
|
||
Consol. APAC |
|
44.1 |
|
(20%) |
|
45.5 |
|
(10%) |
|
89.6 |
|
(15%) |
|
|
|
|
|
|
||
% of total |
|
21 |
% |
|
|
20 |
% |
|
|
20 |
% |
|
|
|
|
|
|
|
||
Total |
$ |
213.2 |
|
(11%) |
$ |
227.6 |
|
(6%) |
$ |
440.8 |
|
(9%) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2022 Sales by Geographic Region and Segment |
|
|
|
|
|
|
|
|
|
|||||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Q1 |
|
% Change y/y |
Q2 |
|
% Change y/y |
Q3 |
|
% Change y/y |
Q4 |
|
% Change y/y |
2022 |
|
% Change y/y |
|||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
43.1 |
|
26% |
$ |
49.9 |
|
20% |
$ |
49.7 |
|
10% |
$ |
56.8 |
|
22% |
$ |
199.5 |
|
19% |
Electronics |
|
77.7 |
|
20% |
|
80.2 |
|
25% |
|
65.0 |
|
1% |
|
48.0 |
|
(26%) |
|
270.9 |
|
5% |
Consol. Americas |
|
120.8 |
|
22% |
|
130.1 |
|
23% |
|
114.7 |
|
5% |
|
104.8 |
|
(6%) |
|
470.4 |
|
11% |
% of total |
|
50 |
% |
|
|
54 |
% |
|
|
55 |
% |
|
53% |
|
|
|
53 |
% |
|
|
EMEA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
52.9 |
|
22% |
$ |
49.0 |
|
5% |
$ |
41.3 |
|
(8%) |
$ |
43.3 |
|
(4%) |
$ |
186.5 |
|
4% |
Electronics |
|
11.8 |
|
27% |
|
12.3 |
|
12% |
|
7.7 |
|
(31%) |
|
5.3 |
|
(50%) |
|
37.1 |
|
(12%) |
Consol. EMEA |
|
64.7 |
|
23% |
|
61.3 |
|
6% |
|
49.0 |
|
(12%) |
|
48.6 |
|
(13%) |
|
223.6 |
|
1% |
% of total |
|
27 |
% |
|
|
25 |
% |
|
|
24 |
% |
|
|
25 |
% |
|
|
25 |
% |
|
APAC: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
41.1 |
|
(1%) |
$ |
43.9 |
|
(2%) |
$ |
40.2 |
|
(7%) |
$ |
40.1 |
|
3% |
$ |
165.3 |
|
(2%) |
Electronics |
|
13.9 |
|
23% |
|
6.4 |
|
(58%) |
|
3.3 |
|
(77%) |
|
2.5 |
|
(79%) |
|
26.1 |
|
(51%) |
Consol. APAC |
|
55.0 |
|
4% |
|
50.3 |
|
(16%) |
|
43.5 |
|
(25%) |
|
42.6 |
|
(16%) |
|
191.4 |
|
(14%) |
% of total |
|
23 |
% |
|
|
21 |
% |
|
|
21 |
% |
|
|
22 |
% |
|
|
22 |
% |
|
Total |
$ |
240.5 |
|
17% |
$ |
241.7 |
|
8% |
$ |
207.2 |
|
(7%) |
$ |
196.0 |
|
(10%) |
$ |
885.4 |
|
2% |
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 13 of 15 |
HELIOS TECHNOLOGIES
Non-GAAP Adjusted Operating Income RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
||||
GAAP operating income |
$ |
29.5 |
|
|
$ |
43.0 |
|
|
$ |
54.3 |
|
|
$ |
85.9 |
|
Acquisition-related amortization of intangible assets |
|
8.3 |
|
|
|
6.8 |
|
|
|
16.4 |
|
|
|
13.8 |
|
Acquisition and financing-related expenses(A) |
|
1.1 |
|
|
|
0.9 |
|
|
|
2.8 |
|
|
|
1.8 |
|
Restructuring charges(B) |
|
3.1 |
|
|
|
1.7 |
|
|
|
4.3 |
|
|
|
1.9 |
|
Officer transition costs |
|
- |
|
|
|
- |
|
|
|
0.8 |
|
|
|
0.3 |
|
Acquisition integration costs (C) |
|
0.1 |
|
|
|
0.6 |
|
|
|
0.2 |
|
|
|
1.7 |
|
Other |
|
- |
|
|
|
0.2 |
|
|
|
(0.1 |
) |
|
|
0.2 |
|
Non-GAAP adjusted operating income |
$ |
42.1 |
|
|
$ |
53.2 |
|
|
$ |
78.7 |
|
|
$ |
105.6 |
|
GAAP operating margin |
|
13.0 |
% |
|
|
17.8 |
% |
|
|
12.3 |
% |
|
|
17.8 |
% |
Non-GAAP adjusted operating margin |
|
18.5 |
% |
|
|
22.0 |
% |
|
|
17.9 |
% |
|
|
21.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Twelve Months Ended |
|
|||||||||||
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|||||
Net income |
$ |
16.8 |
|
|
$ |
30.0 |
|
|
$ |
30.6 |
|
|
$ |
60.5 |
|
|
$ |
68.6 |
|
Interest expense, net |
|
7.8 |
|
|
|
3.8 |
|
|
|
14.0 |
|
|
|
7.6 |
|
|
|
23.1 |
|
Income tax provision |
|
5.0 |
|
|
|
8.7 |
|
|
|
9.2 |
|
|
|
17.5 |
|
|
|
15.0 |
|
Depreciation and amortization |
|
16.1 |
|
|
|
12.4 |
|
|
|
31.3 |
|
|
|
25.0 |
|
|
|
57.9 |
|
EBITDA |
|
45.7 |
|
|
|
55.0 |
|
|
|
85.1 |
|
|
|
110.6 |
|
|
|
164.6 |
|
Acquisition and financing-related expenses(A) |
|
1.1 |
|
|
|
0.9 |
|
|
|
2.8 |
|
|
|
1.8 |
|
|
|
6.9 |
|
Restructuring charges(B) |
|
3.1 |
|
|
|
1.7 |
|
|
|
4.3 |
|
|
|
1.9 |
|
|
|
5.8 |
|
Officer transition costs |
|
- |
|
|
|
- |
|
|
|
0.8 |
|
|
|
0.3 |
|
|
|
0.8 |
|
Acquisition integration costs (C) |
|
0.1 |
|
|
|
0.6 |
|
|
|
0.2 |
|
|
|
1.7 |
|
|
|
2.0 |
|
Change in fair value of contingent consideration |
|
0.6 |
|
|
|
0.6 |
|
|
|
0.7 |
|
|
|
1.5 |
|
|
|
1.1 |
|
Other |
|
(0.5 |
) |
|
|
0.2 |
|
|
|
(0.5 |
) |
|
|
0.2 |
|
|
|
(0.6 |
) |
Adjusted EBITDA |
$ |
50.1 |
|
|
$ |
59.0 |
|
|
$ |
93.4 |
|
|
$ |
118.0 |
|
|
$ |
180.6 |
|
Adjusted EBITDA margin |
|
22.0 |
% |
|
|
24.4 |
% |
|
|
21.2 |
% |
|
|
24.5 |
% |
|
|
21.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Pre-acquisition adjusted EBITDA, 2023 Schultes and i3, 2022 Daman |
|
|
|
|
|
|
|
|
|
|
|
|
|
7.4 |
|
||||
TTM Pro forma adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
188.0 |
|
||||
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 14 of 15 |
HELIOS TECHNOLOGIES
Non-GAAP Cash Net Income RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
July 1, 2023 |
|
|
July 2, 2022 |
|
|
July 1, 2023 |
|
|
July 2, 2022 |
|
||||
Net income |
$ |
16.8 |
|
|
$ |
30.0 |
|
|
$ |
30.6 |
|
|
$ |
60.5 |
|
Amortization of intangible assets(D) |
|
8.4 |
|
|
|
6.9 |
|
|
|
16.8 |
|
|
|
14.0 |
|
Acquisition and financing-related expenses(A) |
|
1.1 |
|
|
|
0.9 |
|
|
|
2.8 |
|
|
|
1.8 |
|
Restructuring charges(B) |
|
3.1 |
|
|
|
1.7 |
|
|
|
4.3 |
|
|
|
1.9 |
|
Officer transition costs |
|
- |
|
|
|
- |
|
|
|
0.8 |
|
|
|
0.3 |
|
Acquisition integration costs (C) |
|
0.1 |
|
|
|
0.6 |
|
|
|
0.2 |
|
|
|
1.7 |
|
Change in fair value of contingent consideration |
|
0.6 |
|
|
|
0.6 |
|
|
|
0.7 |
|
|
|
1.5 |
|
Other |
|
(0.5 |
) |
|
|
0.2 |
|
|
|
(0.5 |
) |
|
|
0.2 |
|
Tax effect of above |
|
(2.8 |
) |
|
|
(2.7 |
) |
|
|
(5.5 |
) |
|
|
(5.4 |
) |
Non-GAAP cash net income |
$ |
26.8 |
|
|
$ |
38.3 |
|
|
$ |
50.2 |
|
|
$ |
76.6 |
|
Non-GAAP cash net income per diluted share |
$ |
0.81 |
|
|
$ |
1.18 |
|
|
$ |
1.53 |
|
|
$ |
2.35 |
|
(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 meaningful to analyze results with the costs excluded. For the three months and six months ended July 1, 2023, the charges include recurring labor costs of $0.2 million and $0.5 million, professional fees of $0.5 million and $1.6 million and other M&A related costs of $0.4 million and $0.7 million, respectively.
(B) Restructuring activities include costs associated with the creation of our two new Regional Operational Centers of Excellence. We believe these costs are not representative of the Company's operational performance and it is therefore meaningful to analyze results with the costs excluded. For the three months and six months ended July 1, 2023, the charges include non-recurring labor costs of $2.0 million and $2.6 million, travel costs of $0.3 million and $0.5 million and manufacturing relocation and other costs of $0.8 million and $1.2 million, respectively.
(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 meaningful to analyze results with the costs excluded. For the three months and six months ended July 1, 2023, these costs totaled $0.1 million and $0.2 million, respectively.
(D) Amortization of intangible assets presented here includes $0.1 million and $0.4 million of amortization for capitalized software development costs included within cost of sales in the income statement for the three months and six months ended July 1, 2023, respectively.
Helios Technologies Reports Strong Sequential Growth in the Second Quarter 2023
with Revenue Up 7% and Net Income Up 21%
August 7, 2023 |
Page 15 of 15 |
HELIOS TECHNOLOGIES
Non-GAAP Sales Growth RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||||||||||
|
Hydraulics |
|
|
Electronics |
|
|
Consolidated |
|
|
Hydraulics |
|
|
Electronics |
|
|
Consolidated |
|
||||||
Q2 2023 Net Sales |
$ |
152.4 |
|
|
$ |
75.2 |
|
|
$ |
227.6 |
|
|
$ |
300.1 |
|
|
$ |
140.7 |
|
|
$ |
440.8 |
|
Impact of foreign currency translation(E) |
|
0.2 |
|
|
|
0.1 |
|
|
|
0.3 |
|
|
|
3.4 |
|
|
|
0.3 |
|
|
|
3.7 |
|
Net Sales in constant currency |
|
152.6 |
|
|
|
75.3 |
|
|
|
227.9 |
|
|
|
303.5 |
|
|
|
141.0 |
|
|
|
444.5 |
|
Less: Acquisition related sales |
|
(15.2 |
) |
|
|
(1.2 |
) |
|
|
(16.4 |
) |
|
|
(28.9 |
) |
|
|
(1.2 |
) |
|
|
(30.1 |
) |
Organic sales in constant currency |
$ |
137.4 |
|
|
$ |
74.1 |
|
|
$ |
211.5 |
|
|
$ |
274.6 |
|
|
$ |
139.8 |
|
|
$ |
414.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q2 2022 Net Sales |
$ |
142.8 |
|
|
$ |
98.9 |
|
|
$ |
241.7 |
|
|
$ |
279.9 |
|
|
$ |
202.3 |
|
|
$ |
482.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales growth |
|
7 |
% |
|
|
-24 |
% |
|
|
-6 |
% |
|
|
7 |
% |
|
|
-30 |
% |
|
|
-9 |
% |
Net sales growth in constant currency |
|
7 |
% |
|
|
-24 |
% |
|
|
-6 |
% |
|
|
8 |
% |
|
|
-30 |
% |
|
|
-8 |
% |
Organic net sales growth in constant currency |
|
-4 |
% |
|
|
-25 |
% |
|
|
-12 |
% |
|
|
-2 |
% |
|
|
-31 |
% |
|
|
-14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(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 |
|
|
|
|
July 1, 2023 |
|
|
Current portion of long-term non-revolving debt, net |
|
|
20.5 |
|
Revolving lines of credit |
|
|
218.9 |
|
Long-term non-revolving debt, net |
|
|
309.7 |
|
Total debt |
|
|
549.1 |
|
Less: Cash and cash equivalents |
|
|
37.5 |
|
Net debt |
|
|
511.6 |
|
|
|
|
|
|
TTM Pro forma adjusted EBITDA (F) |
|
|
188.0 |
|
Ratio of net debt to TTM pro forma adjusted EBITDA |
|
|
2.72 |
|
(F) On a pro-forma basis for Daman, Schultes, and i3. |
|
|||
Non-GAAP Financial Measures and Non-GAAP Forward-looking Financial Measures:
Adjusted operating income, adjusted operating margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, net debt-to-adjusted EBITDA, cash net income, cash net income per diluted share and sales in constant currency are not measures determined in accordance with generally accepted accounting principles in the United States, commonly known as GAAP. Nevertheless, 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. These Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for GAAP. Please carefully review the attached 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. The Company does not provide a reconciliation of forward-looking non-GAAP financial measures, such as adjusted EBITDA, adjusted EBITDA margin and cash net income and cash net income per diluted share disclosed above in our 2023 Outlook, to their comparable GAAP financial measures because it could not do so without unreasonable effort due to the unavailability of the information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods.