Core Viewpoint - Helios Technologies has appointed Jeremy Evans as the new Chief Financial Officer, succeeding Michael Connaway, effective immediately. This change is part of the company's strategy to enhance leadership and operational efficiency as it returns to year-over-year growth [2][3][4]. Company Leadership - Jeremy Evans has been with Helios for nearly two years and has demonstrated strong leadership and collaboration skills. He has played a significant role in strategic planning and has provided interim leadership across critical financial functions [3][4]. - Prior to his promotion, Evans served as Chief Accounting Officer and has over 25 years of experience in operational and financial management, including a role at Tech Data [3]. Company Strategy and Performance - Helios Technologies is focused on executing its strategy to improve operational efficiencies, strengthen working capital discipline, and optimize its portfolio to maximize returns on investments [4]. - The company is experiencing a return to year-over-year growth, reporting a 13% increase in sales in the third quarter of 2025 as demand continues to improve [4][11]. Company Overview - Helios Technologies is a global leader in motion control and electronic controls technology, serving diverse markets such as construction, agriculture, and energy. The company has a presence in over 90 countries and has consistently paid dividends since going public in 1997 [5].

Core Insights - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article suggests that users may face blocks if they have an ad-blocker enabled [1]

Core Viewpoint - Helios Technologies (HLIO) has shown a 7% increase in stock price over the past four weeks, with a mean price target of $67.33 indicating a potential upside of 26.8% from the current price of $53.12 [1] Price Targets and Analyst Estimates - The mean estimate consists of three short-term price targets with a standard deviation of $4.93, where the lowest estimate is $64.00 (20.5% increase) and the highest is $73.00 (37.4% increase) [2] - A low standard deviation among price targets suggests a strong agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about HLIO's earnings prospects, as indicated by a positive trend in earnings estimate revisions [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 2.5%, with one estimate moving higher and no negative revisions [12] - HLIO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on consensus price targets for investment decisions may not be wise, as analysts' ability to set unbiased targets has been questioned [3][7] - Price targets should be treated with skepticism, as they can often mislead investors [10]

Core Insights - Helios Technologies experienced a year-over-year sales increase in Q3, but the market reacted negatively due to concerns about future momentum and margin sustainability [1] - The Electronics segment, particularly Enovation Controls, showed strong performance, with management attributing results to renewed go-to-market strategies and higher customer engagement [1] - CEO Sean Bagan described the quarter as a "turning point," while acknowledging the impact of a goodwill write-down related to the i3PD acquisition and ongoing portfolio adjustments [1] Financial Performance - Revenue for Q3 was $220.3 million, exceeding analyst estimates of $212.5 million, representing a 13.3% year-on-year growth and a 3.7% beat [6] - Adjusted EPS was $0.72, beating analyst estimates of $0.66 by 9.8% [6] - Adjusted EBITDA was $45.1 million, with a margin of 20.5%, surpassing analyst estimates of $42.36 million by 6.5% [6] - Revenue guidance for Q4 is $197 million at the midpoint, which is below analyst estimates of $201.2 million [6] - Full-year Adjusted EPS guidance was raised to $2.47 at the midpoint, reflecting a 2.7% increase [6] - Operating margin decreased to 0.6% from 11.4% in the same quarter last year [6] - Organic revenue rose 12% year-on-year, exceeding analyst estimates of 7.5% growth by 454.1 basis points [6] - Market capitalization stands at $1.80 billion [6] Analyst Insights - Christopher Moore from CJS Securities inquired about recent commercial wins, with CEO Bagan highlighting new contracts in hydraulics and electronics, including a significant AGCO win [6] - Bagan noted that achieving mid-20% margins requires higher sales volumes and cost discipline, emphasizing the need for a healthier mix and operational leverage [6] - Jeffrey Hammond from KeyBanc Capital Markets asked about the recreational vehicle market, with Bagan stating that retail demand is steady and channel inventory levels have normalized [6] - Joseph Grabowski from Baird raised questions about unusual items in the Electronics segment, to which Bagan acknowledged that approximately $3 million of Q4 sales were pulled into Q3, but underlying demand remains strong [6] - Jon Braatz from Kansas City Capital questioned the i3PD goodwill impairment, with CFO Jeremy Evans explaining that engineering resources have been redeployed to core projects [6]

Core Viewpoint - The article emphasizes the importance of identifying sustainable trends in short-term investing, highlighting that while price momentum can be profitable, it requires strong fundamentals to maintain that momentum [1][2]. Group 1: Stock Performance - Helios Technologies (HLIO) has shown a solid price increase of 5.3% over the past 12 weeks, indicating investor confidence in its potential upside [4]. - Over the last four weeks, HLIO's price has increased by 15.1%, suggesting that the upward trend is still intact [5]. - HLIO is currently trading at 91.9% of its 52-week high-low range, indicating a potential breakout [6]. Group 2: Fundamental Strength - HLIO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. - The Zacks Rank system has a strong historical performance, with Rank 1 stocks generating an average annual return of +25% since 1988 [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks with sufficient fundamental strength to sustain their recent uptrends [3]. - In addition to HLIO, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8]. - The article encourages investors to utilize various Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [8].

Financial Data and Key Metrics Changes - The company reported a 13% increase in sales year-over-year, reaching $220 million, exceeding the guidance range of $215 million [14][22] - Adjusted EBITDA margin was above 20%, marking a significant recovery [5][11] - Gross profit increased by 21% year-over-year to $73 million, with gross margin expanding by 200 basis points to 33.1% [15][19] - Diluted EPS was $0.31, down 9% year-over-year, while diluted non-GAAP EPS was $0.72, up 22% [16][19] Business Segment Data and Key Metrics Changes - The electronics segment grew by 21% year-over-year, driven by strong performance in the recreational and industrial markets [14][18] - Hydraulics sales increased by 9% year-over-year, supported by improving demand in mobile and agriculture markets [17][19] - The electronics segment's gross profit and gross margin expanded by 38% and 420 basis points, respectively [18] Market Data and Key Metrics Changes - Year-over-year sales increased double digits across all three regions, with APAC growing by 10% and the Americas by 6% [14][15] - EMEA experienced a typical seasonal decline of 6% [14] - The mobile, recreational, and agriculture markets showed signs of recovery compared to year-over-year comparables [14][15] Company Strategy and Development Direction - The company is focused on organic growth driven by innovation and has launched new products that provide incremental sales streams [24][25] - A restructuring initiative is in place to streamline operations and optimize the portfolio [10][21] - The company aims to reduce its leverage ratio to around two times by year-end, allowing for strategic investments in 2026 [11][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2026 with growth, citing improved demand trends and healthier dealer inventory levels [21][68] - The company anticipates fourth-quarter sales in the range of $192-$202 million, representing a 10% increase year-over-year [22] - Management highlighted the importance of volume growth to achieve mid-20s EBITDA margins in the future [34][36] Other Important Information - The company closed the sale of Custom Fluidpower, recording a gain of $21 million, while also writing down $25.9 million of goodwill related to i3 Product Development [9][10] - The company is committed to maintaining its long dividend history and opportunistically repurchasing shares [11][24] Q&A Session Summary Question: Can you provide insight into recent commercial wins and visibility into 2026? - Management highlighted recent wins in various sectors, including agriculture and recreational markets, indicating a positive outlook for 2026 [30][31] Question: What will it take to return to adjusted EBITDA levels seen in fiscal 2021? - Management noted that increased volume and effective cost management are crucial for achieving mid-20s EBITDA margins [34][36] Question: What is the current state of the recreational vehicle market? - Management indicated that while retail demand has not rebounded, dealer inventory levels are healthier, which is a positive sign for future growth [44][46] Question: Is there any further portfolio reshaping planned? - Management stated that there are no imminent changes but emphasized ongoing evaluations of the portfolio [48][50] Question: What are the plans for the i3 Product Development operation? - Management clarified that the focus is on integrating talented engineers into the broader Helios portfolio rather than pursuing standalone projects [74][76]

Financial Data and Key Metrics Changes - Sales in Q3 2025 were $220 million, a 13% increase year-over-year, exceeding guidance of $215 million [19] - Adjusted EBITDA margin was above 20%, marking a return to growth after previous declines [7][8] - Gross profit increased 21% year-over-year to $73 million, with gross margin expanding 200 basis points to 33.1% [21] - Diluted EPS was $0.31, down 9% year-over-year, while diluted non-GAAP EPS was $0.72, up 22% [23] Business Segment Data and Key Metrics Changes - Electronics segment sales grew 21% year-over-year, driven by strong performance in innovation controls [19][25] - Hydraulics segment sales increased 9% year-over-year, supported by improving demand in mobile and agriculture markets [19][24] - Gross profit and gross margin for Hydraulics grew 12% and 90 basis points, respectively [24] Market Data and Key Metrics Changes - Year-over-year sales increased double digits across all three regions, with APAC growing 10% and The Americas 6% [20] - EMEA experienced a typical seasonal decline of 6% [20] - Foreign exchange positively impacted sales by $1.8 million compared to the previous year [20] Company Strategy and Development Direction - The company is focused on organic growth driven by innovation and has launched new products to capture adjacent markets [33] - Strategic initiatives include restructuring, optimizing operations, and investing in engineering resources [15][30] - The company aims to lower its leverage ratio to around two times by year-end 2025 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in recreational and agricultural markets, indicating a potential upcycle [30][56] - The company expects Q4 2025 sales to be in the range of $192 million to $200 million, representing a 10% increase year-over-year [31] - There is confidence in entering 2026 with growth, supported by improved demand trends and healthier dealer inventory levels [86] Other Important Information - The company closed the sale of Custom Fluid Power, recording a gain of $21 million, while also writing down $25.9 million of goodwill related to i3 product development [14] - The new CFO, Michael Conway, is expected to contribute to the company's growth and financial improvements [17] Q&A Session Summary Question: Can you provide insight into recent commercial wins and visibility into 2026? - Management highlighted a focus on go-to-market strategies and recent wins in various segments, indicating positive sales and order levels [39][40] Question: What will it take to return to adjusted EBITDA levels seen in fiscal 2021? - Management noted that achieving mid-20s EBITDA margins will require increased volume and highlighted the importance of their go-to-market initiatives [45][46] Question: Is there any more portfolio reshaping needed? - Management stated that there are no imminent changes but will continue to evaluate the portfolio for performance [60][61] Question: Can you discuss the growth in the agricultural market? - Growth in agriculture is attributed to improved dealer inventory levels and positive trends in incoming orders, indicating a potential recovery [76][78] Question: What changes are being made to turn around the i3 operation? - The focus is on leveraging talented engineers from the i3 acquisition to benefit the broader Helios portfolio rather than pursuing standalone projects [92][95]

Financial Performance - Net sales reached $220 million, a 13% year-over-year increase[12] - Diluted Non-GAAP EPS was $072, up 22% year-over-year[12] - Adjusted EBITDA margin was 205%, a decrease of 40 bps year-over-year[12] - Gross profit increased 21% year-over-year, with gross margin expanding 200 bps[23] Segment Performance - Hydraulics segment sales were $1413 million, up 9% year-over-year[38] - Electronics segment sales were $790 million, up 21% year-over-year[41] Cash Flow and Debt - Free cash flow was $185 million[43] - Net debt to TTM adjusted EBITDA ratio was 24x[54] Outlook - Full year 2025 total net sales are projected to be between $820 million and $830 million, representing a 2% to 3% increase relative to 2024[56] - Full year 2025 diluted Non-GAAP EPS is projected to be between $243 and $250, representing a 16% to 19% increase relative to 2024[56] - Fourth quarter 2025 sales outlook for Hydraulics is $121 million to $128 million, a 1% to 7% increase versus Q4 2024[59] - Fourth quarter 2025 sales outlook for Electronics is $71 million to $74 million, a 19% to 24% increase versus Q4 2024[59]

Financial Performance - Third quarter net sales increased to $220 million, a 13% growth compared to the prior year, with Hydraulics up 9% and Electronics up 21%[4] - Total net sales for Q3 2025 were $220.3 million, representing a 13% year-over-year growth compared to $194.5 million in Q3 2024[33] - Helios Technologies reported a year-over-year sales growth of 13% for the third quarter of 2025, with consolidated net sales reaching $220.3 million compared to $194.5 million in the same period of 2024[36] - The Hydraulics segment generated net sales of $141.3 million, up from $129.4 million, while the Electronics segment saw an increase to $79.0 million from $65.1 million[39] - Organic net sales growth in constant currency for Q3 2025 was 12%, with hydraulics segment sales at $141.3 million and electronics segment sales at $79.0 million[47] Profitability - Gross margin expanded by 200 basis points to 33.1%, despite tariff headwinds, with gross profit rising 21% to $73 million[4] - Non-GAAP adjusted operating income for Q3 2025 was $36.6 million, with a margin of 16.6%, compared to $32.2 million and 16.6% in Q3 2024[43] - The company's adjusted EBITDA for Q3 2025 was $45.1 million, representing a margin of 20.5%, up from $40.6 million and a margin of 20.9% in Q3 2024[44] - Net income for Q3 2025 was $10.3 million, with a net income margin of 4.7%, compared to $11.4 million and a margin of 5.9% in Q3 2024[44] - A goodwill write-down of $25.9 million related to the i3 Product Development business impacted operating income significantly[4] Cash Flow and Debt Management - The company generated $25.2 million in net cash from operations in Q3 2025, a decrease of 28% from the previous year due to increased accounts receivable[23] - Total debt decreased by 13% to $419.1 million as of September 27, 2025, down from $483.4 million a year earlier[23] - Cash and cash equivalents increased by 18% to $54.9 million compared to the same period last year[23] - The net debt-to-adjusted EBITDA leverage ratio improved to 2.4x from 2.8x year-over-year[23] - The company reported a net debt of $364.2 million as of September 27, 2025, with a net debt-to-adjusted EBITDA ratio of 2.4[49][50] Regional Sales Performance - Sales growth was observed across all regions: Americas up 11%, APAC up 14%, and EMEA up 18% year-over-year[8] - The Americas region accounted for 52% of total sales in Q3 2025, with a total of $114.2 million, showing an 11% increase year-over-year[41] - EMEA region sales for Q3 2025 were $51.0 million, an 18% increase year-over-year, representing 23% of total sales[41] - APAC region sales reached $55.1 million in Q3 2025, a 14% increase year-over-year, contributing 25% to total sales[41] Future Outlook - The company is tightening and raising the mid-point of its FY25 outlook, reflecting stronger-than-expected Q3 results[4] - The company expects to exceed the mid-point of its original full-year outlook for 2025 despite tariff headwinds and divestiture challenges[20] - Helios Technologies continues to focus on improving demand and expanding its market presence, particularly in the Hydraulics segment[38] - The company expects continued improvement in demand, supporting a positive outlook for future quarters[42] Shareholder Returns - The company paid its 115th consecutive quarterly cash dividend of $0.09 per share on October 21, 2025[23] - The company repurchased 50,000 shares for $2.7 million in Q3 2025[23] Impairments and Adjustments - The company reported a goodwill impairment of $25.9 million during the nine months ended September 27, 2025[37] - Goodwill impairment for the twelve months ended September 27, 2025, was $25.9 million, accounting for 3.2% of total income[43] Taxation - The effective tax rate for Q3 2025 was 19.8%, compared to 14.2% in the same period of 2024[13] Other Financial Metrics - Diluted Non-GAAP EPS increased by 22% to $0.72, the highest level since Q2 2023[4] - Total assets rose to $1,555.8 million, up from $1,505.4 million, driven by increases in current assets[35] - Total liabilities decreased slightly to $637.9 million from $641.0 million, indicating improved financial stability[35] - SEA expenses increased by 26% year-over-year, primarily due to higher benefit costs and adjustments from the previous CEO's termination[8] - The company's GAAP operating income for Q3 2025 was $1.3 million, with a margin of 0.6%, compared to $22.2 million and 11.4% in Q3 2024[43] - The company emphasized the importance of non-GAAP financial measures for better understanding operating performance, which should be considered alongside GAAP results[50]

Core Viewpoint - Helios Technologies has shown strong stock performance, with an 8.4% increase over the past month and a 27.9% rise since the beginning of the year, outperforming both the Zacks Industrial Products sector and the Zacks Manufacturing - General Industrial industry [1] Financial Performance - The company has consistently exceeded earnings expectations, beating the Zacks Consensus Estimate in the last four quarters, with the latest EPS reported at $0.59 against a consensus of $0.49, and a revenue beat of 6.09% [2] - For the current fiscal year, Helios Technologies is projected to achieve earnings of $2.41 per share on revenues of $822.3 million, reflecting a 14.76% increase in EPS and a 2.03% increase in revenues [3] - The next fiscal year forecasts earnings of $2.57 per share on revenues of $817.4 million, indicating a year-over-year change of 6.64% in EPS and a slight decline of 0.6% in revenues [3] Valuation Metrics - The stock trades at 23.7 times the current fiscal year EPS estimates, which is comparable to the peer industry average of 23.8 times, while on a trailing cash flow basis, it trades at 14.1 times compared to the peer group's average of 17.2 times [7] - Helios Technologies has a Value Score of C, with Growth and Momentum Scores also at C, resulting in a combined VGM Score of B [6] Zacks Rank - The stock holds a Zacks Rank of 2 (Buy), supported by a positive earnings estimate revision trend, making it a suitable choice for investors looking for stocks with strong potential [8][9]