Core Viewpoint - The article emphasizes the importance of identifying sustainable trends in short-term investing, highlighting that while price momentum can be profitable, ensuring its longevity is crucial for success [1][2]. Group 1: Stock Performance - Helios Technologies (HLIO) has shown a significant price increase of 73.2% over the past 12 weeks, indicating strong investor interest [4]. - In the last four weeks, HLIO's stock price has risen by 50.8%, suggesting that the upward trend is still intact [5]. - Currently, HLIO is trading at 87.8% of its 52-week high-low range, indicating a potential breakout opportunity [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 maintain their upward momentum [3]. - In addition to HLIO, there are other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities [8].

Financial Data and Key Metrics Changes - Sales for the second quarter were $212 million, exceeding the outlook of $206 million, with foreign exchange contributing approximately $3 million to this overachievement [11][19] - Adjusted EBITDA margin was 18.6%, above expectations, despite being impacted by unfavorable product mix and tariff effects [11][12] - Cash from operations reached near-record levels of $37 million, marking a 10% improvement over the previous year [11][26] - Net debt decreased by $67 million year-over-year, improving the net debt to adjusted EBITDA leverage ratio to 2.6 times [12][28] Business Line Data and Key Metrics Changes - Hydraulic sales declined by 3% year-over-year, reflecting weakness in industrial and mobile end markets, although agriculture showed signs of stabilization [23] - Electronics segment sales were down 4% year-over-year, with significant declines in the recreational market [24] - Hydraulics gross profit and gross margin grew by 4% and 220 basis points year-over-year, respectively, due to lower material and direct labor costs [23] - Electronics gross profit declined by 18%, with a 530 basis point drop in gross margin primarily due to higher freight and duties costs [24] Market Data and Key Metrics Changes - EMEA region sales grew by 5% year-over-year, while sales in The Americas and APAC declined [20] - APAC electronics segment sales increased by 27% year-over-year, driven by the health and wellness end market [20] - The overall sales comparables remain negative year-over-year, but profitability improved sequentially with increased sales volume [20] Company Strategy and Development Direction - The company is refocusing its go-to-market strategy and prioritizing capital allocation to improve return on invested capital (ROIC) [12][14] - A definitive agreement was signed to sell Custom Fluid Power for approximately $54 million, which is expected to improve margin rates within the Hydraulics segment [12][14] - The company aims to achieve a sub-two times leverage ratio to enhance capital allocation flexibility [12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery in various markets, including agriculture and health and wellness, with expectations for growth in the second half of the year [31][34] - The company anticipates third-quarter sales in the range of $208 million to $215 million, representing a potential 9% increase year-over-year [35] - Management acknowledged ongoing external challenges, including tariff changes and stagnant interest rates, but remains focused on long-term growth prospects [34][39] Other Important Information - The company has made significant progress in cash management, achieving a trailing twelve months free cash flow conversion rate of 291% [26] - The strategic divestiture of Custom Fluid Power is expected to provide greater flexibility for capital deployment decisions [39] - The company is committed to improving margins across all business lines and evaluating opportunities within its product portfolio [40] Q&A Session Summary Question: Market Inflections and Customer Engagement - Management noted growth in health and wellness and signs of recovery in agriculture, with expectations for all main businesses to grow in the second half of the year [46][48] Question: Non-Core Business Considerations - The divestiture of Custom Fluid Power was strategic, as it did not align with the core business, and no immediate non-core divestitures are planned [50][53] Question: Margin Expectations for the Second Half - Management did not provide specific segment margin guidance but indicated expectations for revenue growth in hydraulics and electronics, with potential margin uplift [62][64] Question: Competitive Positioning in the US - The company highlighted its competitive advantage due to its US manufacturing footprint, which allows for better pricing strategies and differentiation in the market [77][80] Question: Organizational Structure Changes - Management is focused on restructuring to improve efficiency and has made progress in aligning teams with brand and product focus [84][86] Question: Update on Water Guru Partnership - The partnership is expected to ramp up, with initial product launches completed, but significant revenue impact is not anticipated until 2026 [96] Question: Impact of Interest Rate Changes - A reduction in interest rates would be beneficial, particularly for consumer discretionary segments, but the company is prepared to grow without relying on this [98][99]

Financial Performance - Q2 2025 revenue was $212 million, a decrease of 3% year-over-year[14] - Adjusted EBITDA margin for Q2 2025 was 18.6%, down 150 bps year-over-year[14] - Diluted Non-GAAP EPS for Q2 2025 was $0.59, down 8% year-over-year[14] - The company is actively managing the Helios portfolio[12] Divestiture and Acquisition - Helios signed a definitive agreement to sell its Australian Hydraulic Services business (Custom Fluidpower) to Questas Group for approximately $54 million USD[11] - Custom Fluidpower had full-year 2024 sales of $61 million USD and adjusted EBITDA of $8 million USD[11] - Cash proceeds from the divestiture will be primarily used for debt reduction[11] Tariff Impact - Estimated total direct tariff cost impacts for the second half of 2025 are approximately $8 million USD[57] - China and the European Union tariffs represent the greatest impact to Helios[61] Outlook - The company issued full-year 2025 net sales guidance of $810 million to $830 million, representing a +1% to +3% change relative to 2024[66] - The company issued full-year 2025 adjusted EBITDA margin guidance of 18.5% to 19.5%, representing a -70 bps to +30 bps change relative to 2024[66] - The company issued full-year 2025 diluted Non-GAAP EPS guidance of $2.30 to $2.50, representing a +10% to +19% change relative to 2024[66]

Core Insights - Helios Technologies reported Q2 2025 earnings with GAAP sales of $212.5 million, exceeding Wall Street's estimate of $202.99 million, while non-GAAP EPS reached $0.59, surpassing the consensus of $0.51 [1][2] - Despite the revenue beat, both GAAP revenue and net income declined year-over-year, indicating ongoing pressures in certain business units and regions [1][5] - Management described the quarter as a sequential rebound but acknowledged structural challenges and macro risks, particularly in the Electronics segment and global tariff uncertainties [1][12] Financial Performance - Q2 2025 Non-GAAP EPS was $0.59, down 8% from $0.64 in Q2 2024 [2] - GAAP revenue was $212.5 million, a 3% decline from $219.9 million in Q2 2024 [2] - GAAP diluted EPS fell 17% to $0.34 compared to $0.41 in Q2 2024 [2] - Adjusted EBITDA margin decreased to 18.6%, down from 20.1% year-over-year [2][8] Segment Performance - The Hydraulics segment generated GAAP net sales of $140.9 million, with EMEA region sales increasing by 8%, while the Americas and APAC regions saw declines of 9% and 6%, respectively [6] - The Electronics segment reported GAAP revenues of $71.6 million, down 4% year-over-year, despite a 27% increase in APAC [7] - Electronics gross margin fell from 34.6% in Q2 2024 to 29.3%, with operating margin dropping to 8.2% [7] Strategic Initiatives - The company is focusing on a disciplined acquisition strategy, product innovation, and diversification into new markets such as defense and food service [4] - Recent tactical actions include the divestiture of the Custom Fluidpower business for approximately $83 million AUD and ongoing product advancements [10] - Management has emphasized a proactive go-to-market approach and targeting growth opportunities from shifting global trade dynamics [4] Management Outlook - Full-year FY2025 guidance has been upgraded to a sales outlook of $810–830 million, adjusted EBITDA margin of 18.5–19.5%, and Non-GAAP EPS of $2.30–$2.50 [12] - Q3 2025 expectations include net sales between $208 million and $215 million, with an adjusted EBITDA margin of 19.5–20.5% and Non-GAAP EPS between $0.60–$0.68 [12] Operational Highlights - Cash from operations reached $37.0 million, the highest since late 2019, and debt declined by $67 million compared to the prior year [8][9] - The company has maintained a quarterly dividend of $0.09 per share for 114 consecutive quarters [11][15]

Core Viewpoint - Helios Technologies reported quarterly earnings of $0.59 per share, exceeding the Zacks Consensus Estimate of $0.49 per share, although down from $0.64 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +20.41%, with the company previously expected to earn $0.36 per share but actually earning $0.44, resulting in a surprise of +22.22% [2] - Revenues for the quarter were $212.5 million, surpassing the Zacks Consensus Estimate by 6.09%, compared to $219.9 million in the same quarter last year [3] - Over the last four quarters, Helios Technologies has consistently surpassed consensus EPS estimates four times and revenue estimates three times [2][3] Market Performance - Helios Technologies shares have declined approximately 20.6% since the beginning of the year, contrasting with a 6.1% gain in the S&P 500 [4] - The company's current Zacks Rank is 1 (Strong Buy), indicating expectations for the stock to outperform the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.50 on revenues of $198.9 million, and for the current fiscal year, it is $1.90 on revenues of $789.4 million [8] - The outlook for the industry, specifically the Manufacturing - General Industrial sector, is favorable, ranking in the top 16% of over 250 Zacks industries [9]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO highlighted Q2's strong financial execution, near-record cash flow, debt reduction, and strategic portfolio optimization for future growth - The company continued to execute financial priorities, including improving operating leverage, cash conversion cycle, debt reduction, and enhanced profitability[4](index=4&type=chunk) - Q2 generated near-record cash flow, used to strengthen the balance sheet, reduce debt, and return capital to shareholders through dividends and share repurchases[4](index=4&type=chunk) - Market conditions continue to improve but are not fully recovered; the company is enhancing future performance by streamlining operations, focusing on core brands, strengthening its product portfolio, and planning to divest Custom Fluidpower (CFP)[5](index=5&type=chunk) [Q2 2025 Key Financial & Operational Highlights](index=1&type=section&id=Q2%202025%20Key%20Financial%20%26%20Operational%20Highlights) Helios Technologies achieved $212 million in net sales in Q2 2025, a 3% year-over-year decrease but a 9% sequential increase, with improved margins and strong operating cash flow, while reducing debt and optimizing its portfolio Q2 2025 Key Financial Metrics | Metric | Q2 2025 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Net Sales | $212 Million | -3% | +9% | | Gross Margin | 31.8% | -30 bps | +120 bps | | Operating Margin | 10.3% | -150 bps | +160 bps | | Diluted EPS (GAAP) | $0.34 | -17% | - | | Diluted EPS (Non-GAAP) | $0.59 | -8% | - | | Operating Cash Flow | $37 Million | +10% | - | | Net Debt to Adjusted EBITDA Ratio | 2.6x | Improved (vs 3.0x) | - | - The company reduced debt for the eighth consecutive quarter, down **$67 million (13%)** year-over-year[6](index=6&type=chunk) - A definitive agreement was announced to sell Custom Fluidpower (CFP) for approximately **A$83 million**, optimizing the operating structure by refocusing brand market strategy and adjusting engineering assets[6](index=6&type=chunk) [Consolidated Financial Results](index=3&type=section&id=Consolidated%20Financial%20Results) [Overview of Q2 2025 Consolidated Performance](index=3&type=section&id=Overview%20of%20Q2%202025%20Consolidated%20Performance) Helios Technologies reported a 3% year-over-year decrease in Q2 2025 net sales to $212.5 million, with corresponding declines in gross profit, operating income, net income, and adjusted EBITDA Q2 2025 Consolidated Financial Performance (GAAP & Non-GAAP) | Metric | Q2 2025 | Q2 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $212.5 Million | $219.9 Million | $(7.4) Million | (3%) | | Gross Profit | $67.5 Million | $70.6 Million | $(3.1) Million | (4%) | | Gross Margin | 31.8% | 32.1% | (30) bps | - | | Operating Income | $21.9 Million | $26.0 Million | $(4.1) Million | (16%) | | Operating Margin | 10.3% | 11.8% | (150) bps | - | | Non-GAAP Adjusted Operating Margin | 15.0% | 16.4% | (140) bps | - | | Net Income | $11.4 Million | $13.6 Million | $(2.2) Million | (16%) | | Diluted EPS | $0.34 | $0.41 | $(0.07) | (17%) | | Non-GAAP Net Income | $19.5 Million | $21.5 Million | $(2.0) Million | (9%) | | Diluted Non-GAAP EPS | $0.59 | $0.64 | $(0.05) | (8%) | | Adjusted EBITDA | $39.5 Million | $44.2 Million | $(4.7) Million | (11%) | | Adjusted EBITDA Margin | 18.6% | 20.1% | (150) bps | - | [Sales Performance](index=3&type=section&id=Sales%20Performance) Q2 2025 net sales decreased 3% year-over-year, with declines in Hydraulics and Electronics, but showed a 9% sequential increase, driven by EMEA and APAC growth Q2 2025 Sales Performance Changes | Metric | YoY Change | QoQ Change | | :--- | :--- | :--- | | Net Sales | -3% | +9% ($17 Million) | | Hydraulics Sales | -3% | - | | Electronics Sales | -4% | - | | Americas Sales | -7% | +1% | | EMEA Sales | +5% | +24% | | APAC Sales | -2% | +12% | | Foreign Exchange Impact | +$1.5 Million | - | - Electronics sales decline primarily impacted by a significant drop in the recreational market, while the industrial market saw slight growth[10](index=10&type=chunk) - Hydraulics sales decline primarily reflects weakness in the industrial and mobile markets[10](index=10&type=chunk) [Profitability and Margins](index=3&type=section&id=Profitability%20and%20Margins) Gross profit decreased 4% year-over-year in Q2 2025 due to lower sales volume and higher material costs, but improved 13% sequentially from sales leverage, while SEA expenses rose 2% from leadership changes Q2 2025 Profit and Margin Changes | Metric | YoY Change | QoQ Change | | :--- | :--- | :--- | | Gross Profit | -4% ($3.1 Million) | +13% | | Gross Margin | -30 bps | +120 bps | | SEA Expenses | +2% ($0.6 Million) | +7% ($2.6 Million) | | Intangible Asset Amortization | +5% ($8.3 Million) | - | - Gross margin contraction year-over-year primarily due to lower sales volume and higher material costs as a percentage of sales, while sequential growth benefited from improved sales leverage[10](index=10&type=chunk) - SEA expenses increased primarily due to Electronics leadership changes, higher-than-anticipated performance compensation accruals, and annual salary adjustments[10](index=10&type=chunk) [Non-Operating Items & Net Income](index=4&type=section&id=Non-Operating%20Items%20%26%20Net%20Income) Net interest expense decreased by $1.5 million in Q2 2025 due to lower debt and rates, while GAAP net income and diluted EPS declined 16% and 17% respectively, impacted by lower sales and margin changes Q2 2025 Non-Operating Items and Net Income Changes | Metric | Q2 2025 | Q2 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Net Interest Expense | $7.0 Million | $8.5 Million | $(1.5) Million | (18%) | | Effective Tax Rate | 23.8% | 23.0% | +0.8% | - | | GAAP Net Income | $11.4 Million | $13.6 Million | $(2.2) Million | (16%) | | Diluted EPS | $0.34 | $0.41 | $(0.07) | (17%) | | Diluted Non-GAAP EPS | $0.59 | $0.64 | $(0.05) | (8%) | | Adjusted EBITDA Margin | 18.6% | 20.1% | (150) bps | - | - Net interest expense decreased primarily due to lower debt balances and interest rates[14](index=14&type=chunk) - GAAP net income and diluted EPS decreased primarily due to lower sales and unfavorable changes in gross margin and operating expenses[14](index=14&type=chunk) [Segment Performance Review](index=4&type=section&id=Segment%20Performance%20Review) [Hydraulics Segment](index=4&type=section&id=Hydraulics%20Segment) The Hydraulics segment reported a 3% sales decrease in Q2 2025 due to weak industrial and mobile markets, but gross margin expanded 220 bps to 33.0% from lower costs, leading to a 5% increase in operating income Q2 2025 Hydraulics Segment Performance | Metric | Q2 2025 | Q2 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $140.9 Million | $145.7 Million | $(4.8) Million | (3%) | | Americas Sales | $54.2 Million | $59.5 Million | $(5.3) Million | (9%) | | EMEA Sales | $46.1 Million | $42.8 Million | $3.3 Million | 8% | | APAC Sales | $40.6 Million | $43.4 Million | $(2.8) Million | (6%) | | Gross Profit | $46.5 Million | $44.9 Million | $1.6 Million | 4% | | Gross Margin | 33.0% | 30.8% | 220 bps | - | | Operating Income | $25.0 Million | $23.9 Million | $1.1 Million | 5% | | Operating Margin | 17.7% | 16.4% | 130 bps | - | - Sales decline primarily impacted by weakness in industrial and mobile end markets, with agricultural market sales relatively flat[15](index=15&type=chunk) - Gross margin expansion primarily due to lower material and direct labor costs, partially offset by lower sales volume and net tariff impacts[15](index=15&type=chunk) [Electronics Segment](index=5&type=section&id=Electronics%20Segment) The Electronics segment's Q2 2025 net sales decreased 4% due to the recreational market, while gross margin declined 530 bps to 29.3% from lower volume, higher material costs, and increased freight and duties, leading to a 43% drop in operating income Q2 2025 Electronics Segment Performance | Metric | Q2 2025 | Q2 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $71.6 Million | $74.2 Million | $(2.6) Million | (4%) | | Americas Sales | $53.7 Million | $57.8 Million | $(4.1) Million | (7%) | | EMEA Sales | $8.5 Million | $9.0 Million | $(0.5) Million | (6%) | | APAC Sales | $9.4 Million | $7.4 Million | $2.0 Million | 27% | | Gross Profit | $21.0 Million | $25.7 Million | $(4.7) Million | (18%) | | Gross Margin | 29.3% | 34.6% | (530) bps | - | | Operating Income | $5.9 Million | $10.3 Million | $(4.4) Million | (43%) | | Operating Margin | 8.2% | 13.9% | (570) bps | - | - Sales decline primarily impacted by reduced sales in the recreational end market[20](index=20&type=chunk) - Gross margin decline primarily due to lower sales volume, higher material costs, and increased freight and duties, including a **$2.4 million** product import classification change charge[20](index=20&type=chunk) [Financial Position & Cash Flow](index=5&type=section&id=Financial%20Position%20%26%20Cash%20Flow) [Cash Flow Generation](index=5&type=section&id=Cash%20Flow%20Generation) Helios Technologies generated $37 million in operating cash flow in Q2 2025, a 10% year-over-year increase, marking its highest level since Q4 2019 and the second-highest in company history Q2 2025 Operating Cash Flow | Metric | Q2 2025 | | :--- | :--- | | Operating Cash Flow | $37.0 Million | | YoY Growth | +10% | | Historical Level | Highest since Q4 2019, second-highest in company history | [Balance Sheet Strength & Debt Management](index=5&type=section&id=Balance%20Sheet%20Strength%20%26%20Debt%20Management) As of June 28, 2025, total debt decreased 13% year-over-year to $436.2 million, improving the net debt to adjusted EBITDA ratio to 2.6x, while cash and cash equivalents increased 20% and the cash conversion cycle reached a multi-year low Debt and Cash Position as of Q2 2025 End | Metric | June 28, 2025 | June 29, 2024 | Change Percentage | | :--- | :--- | :--- | :--- | | Total Debt | $436.2 Million | $502.7 Million | -13% | | Cash & Cash Equivalents | $53.0 Million | $45.0 Million | +20% | | Net Debt to Adjusted EBITDA Ratio | 2.6x | 3.0x | Improved | | Available Revolving Credit Facility | $358.6 Million | - | - | - Cash conversion cycle reached its lowest level since the first half of 2022[20](index=20&type=chunk) - Inventory increased **4%** year-over-year to prepare for sequential sales growth[20](index=20&type=chunk) [Capital Allocation](index=6&type=section&id=Capital%20Allocation) In Q2 2025, the company repurchased 200,000 shares for $6.5 million, paid its 114th consecutive quarterly dividend, and reduced capital expenditures to $5.4 million Q2 2025 Capital Allocation Activities | Activity | Details | | :--- | :--- | | Share Repurchases | 200,000 shares, average price $32.29/share, totaling $6.5 Million | | Dividend Payments | 114th consecutive quarterly cash dividend, $0.09 per share | | Capital Expenditures | $5.4 Million (2.5% of sales) | - The company has paid quarterly dividends for over **28 consecutive years**[26](index=26&type=chunk) [Outlook](index=6&type=section&id=Outlook) [Full Year 2025 and Q3 2025 Guidance](index=6&type=section&id=Full%20Year%202025%20and%20Q3%202025%20Guidance) Helios Technologies raised its full-year 2025 outlook, projecting net sales between $810 million and $830 million, adjusted EBITDA margin of 18.5% to 19.5%, and diluted non-GAAP EPS of $2.30 to $2.50, while providing Q3 2025 guidance reflecting continued growth despite market uncertainties FY 2025 and Q3 2025 Performance Outlook | Metric | Previous FY 2025 Outlook (2/24/2025) | New FY 2025 Outlook (8/4/25) | Q3 2025 Outlook (8/4/25) | | :--- | :--- | :--- | :--- | | Total Net Sales | $775 Million to $825 Million | $810 Million to $830 Million | $208 Million to $215 Million | | Adjusted EBITDA Margin | 18.0% to 20.0% | 18.5% to 19.5% | 19.5% to 20.5% | | Diluted Non-GAAP EPS | $2.00 to $2.40 | $2.30 to $2.50 | $0.60 to $0.68 | - The company expects modest full-year growth, even after adjusting for the announced CFP divestiture[22](index=22&type=chunk) - Consolidated orders have grown for seven consecutive months, with some markets showing signs of stabilization, but tariffs and weakness in certain end markets still present uncertainties[22](index=22&type=chunk) [Company Information](index=6&type=section&id=Company%20Information) [About Helios Technologies](index=6&type=section&id=About%20Helios%20Technologies) Helios Technologies is a global leader in highly engineered motion and electronic control technologies, serving diverse end markets in over 90 countries, with a growth strategy focused on innovation, acquisitions, and consistent dividend payments since its 1997 IPO - Helios Technologies is a global leader in highly engineered motion control and electronic control technologies[25](index=25&type=chunk) - Company products are sold in over **90 countries**, serving diverse end markets including construction, material handling, agriculture, energy, recreational vehicles, marine, and health[25](index=25&type=chunk) - Growth strategy focuses on becoming a leading supplier in niche markets through innovative product development and acquisitions, and has paid cash dividends every quarter since its **1997 IPO**[25](index=25&type=chunk) [Webcast & Replay Information](index=6&type=section&id=Webcast%20%26%20Replay%20Information) The company will host a conference call and webcast on August 5, 2025, at 9:00 AM ET, to discuss financial results and outlook, with a replay available until August 19, 2025 - The company will host a conference call and webcast on Tuesday, August 5, 2025, at **9:00 AM ET**, to discuss financial and operating results and outlook[23](index=23&type=chunk) - The conference call replay will be available from **1:00 PM ET** on the day of the call until Tuesday, August 19, 2025[24](index=24&type=chunk) [Forward-Looking Statements & Non-GAAP Measures](index=7&type=section&id=Forward-Looking%20Statements%20%26%20Non-GAAP%20Measures) [Forward-Looking Information](index=7&type=section&id=Forward-Looking%20Information) The press release contains forward-looking statements regarding growth strategies, financial plans, and market impacts, where actual results may differ materially due to various risks, and the company undertakes no obligation to update them - The press release contains forward-looking statements regarding growth strategies, profit improvement, new product development, acquisitions and divestitures, financial plans, cost controls, liquidity, dividend payments, changes in customer demand, and trade policy impacts[27](index=27&type=chunk) - Actual results may differ materially due to factors such as global economic trends, supply chain disruptions, capital market conditions, geopolitical conflicts, management changes, new product introductions, sales mix, and environmental, social, and governance objectives[28](index=28&type=chunk) - The company undertakes no obligation to update any forward-looking statements[27](index=27&type=chunk) [Explanation of Non-GAAP Financial Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) Helios Technologies provides various non-GAAP metrics, such as adjusted operating income and EBITDA, as supplemental information for investors and management, acknowledging they are not GAAP substitutes and may not be comparable to other companies, and forward-looking reconciliations are not feasible - The company provides several non-GAAP measures, such as adjusted operating income, adjusted EBITDA, and adjusted net income, to help investors and management understand operating performance[29](index=29&type=chunk)[30](index=30&type=chunk)[54](index=54&type=chunk) - These non-GAAP metrics should be considered supplemental to, not a substitute for, GAAP results, and may not be directly comparable to similarly titled measures from other companies[30](index=30&type=chunk)[54](index=54&type=chunk) - The company cannot provide a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures because relevant information is unavailable and projecting reconciling items would involve unreasonable effort and expense[31](index=31&type=chunk)[54](index=54&type=chunk) [Financial Statements (GAAP & Non-GAAP Reconciliations)](index=9&type=section&id=Financial%20Statements%20%28GAAP%20%26%20Non-GAAP%20Reconciliations%29) [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents Helios Technologies' unaudited consolidated statements of operations for Q2 and H1 2025 and 2024, detailing key financial data including net sales, gross profit, operating income, net income, and EPS Consolidated Statements of Operations (Q2 & H1 2025 vs 2024) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change Percentage | H1 2025 (Millions) | H1 2024 (Millions) | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $212.5 | $219.9 | (3)% | $408.0 | $431.9 | (6)% | | Cost of Sales | $145.0 | $149.3 | (3)% | $280.6 | $294.1 | (5)% | | Gross Profit | $67.5 | $70.6 | (4)% | $127.4 | $137.8 | (8)% | | Gross Margin | 31.8% | 32.1% | - | 31.2% | 31.9% | - | | Selling, Engineering and Administrative Expenses | $37.3 | $36.7 | 2% | $71.9 | $75.7 | (5)% | | Amortization of Intangible Assets | $8.3 | $7.9 | 5% | $16.5 | $15.7 | 5% | | Operating Income | $21.9 | $26.0 | (16)% | $39.0 | $46.4 | (16)% | | Operating Margin | 10.3% | 11.8% | - | 9.6% | 10.7% | - | | Net Interest Expense | $7.0 | $8.5 | (18)% | $14.4 | $16.7 | (14)% | | Income Tax Provision | $3.5 | $4.0 | (12)% | $5.8 | $6.8 | (15)% | | Net Income | $11.4 | $13.6 | (16)% | $18.6 | $22.7 | (18)% | | Diluted EPS | $0.34 | $0.41 | (17)% | $0.56 | $0.68 | (18)% | | Dividends Per Share | $0.09 | $0.09 | - | $0.18 | $0.18 | - | [Consolidated Balance Sheets](index=10&type=section&id=Consolidated%20Balance%20Sheets) This section presents Helios Technologies' unaudited consolidated balance sheets as of June 28, 2025, and December 28, 2024, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheets (June 28, 2025 vs December 28, 2024) | Metric | June 28, 2025 (Millions) | December 28, 2024 (Millions) | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $53.0 | $44.1 | | Accounts Receivable, Net | $123.7 | $104.6 | | Inventories, Net | $187.2 | $190.1 | | Assets Held for Sale | $41.8 | - | | Total Current Assets | $439.1 | $384.2 | | Property, Plant and Equipment, Net | $208.2 | $216.4 | | Goodwill | $523.9 | $498.9 | | Other Intangible Assets, Net | $385.4 | $384.0 | | Total Assets | $1,581.7 | $1,505.4 | | **Liabilities and Stockholders' Equity** | | | | Accounts Payable | $74.9 | $56.7 | | Total Current Liabilities | $174.7 | $138.6 | | Revolving Credit Facility | $141.4 | $147.3 | | Long-Term Non-Revolving Debt, Net | $267.4 | $283.2 | | Total Liabilities | $670.0 | $641.0 | | Total Stockholders' Equity | $911.7 | $864.4 | | Total Liabilities and Stockholders' Equity | $1,581.7 | $1,505.4 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents Helios Technologies' unaudited consolidated statements of cash flows for H1 2025 and 2024, detailing cash flows from operating, investing, and financing activities, with a net increase of $8.9 million in cash and cash equivalents for H1 2025 Consolidated Statements of Cash Flows (H1 2025 vs 2024) | Activity Type | H1 2025 (Millions) | H1 2024 (Millions) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $56.0 | $51.6 | | Net Cash Used in Investing Activities | $(13.2) | $(15.4) | | Net Cash Used in Financing Activities | $(38.5) | $(22.6) | | Effect of Exchange Rate Changes | $4.6 | $(1.0) | | Net Increase in Cash and Cash Equivalents | $8.9 | $12.6 | | Cash and Cash Equivalents, End of Period | $53.0 | $45.0 | - In the first half of 2025, cash flow from operating activities increased year-over-year, while cash outflows from investing and financing activities also increased[38](index=38&type=chunk) [Segment Data](index=12&type=section&id=Segment%20Data) This section provides Helios Technologies' net sales, gross profit, and operating income data for its Hydraulics and Electronics segments for Q2 and H1 2025 and 2024, highlighting segment-specific performance metrics Segment Performance Overview (Q2 & H1 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales (Millions)** | | | | | | Hydraulics | $140.9 | $145.7 | $267.3 | $288.1 | | Electronics | $71.6 | $74.2 | $140.7 | $143.8 | | **Gross Margin** | | | | | | Hydraulics | 33.0% | 30.8% | 31.4% | 31.1% | | Electronics | 29.3% | 34.6% | 30.9% | 33.6% | | **Operating Margin** | | | | | | Hydraulics | 17.7% | 16.4% | 15.9% | 15.9% | | Electronics | 8.2% | 13.9% | 9.9% | 12.1% | [Net Sales by Geographic Region and Segment](index=13&type=section&id=Net%20Sales%20by%20Geographic%20Region%20and%20Segment) This section details Helios Technologies' net sales by geographic region and business segment for Q1, Q2, and H1 2025, and for each quarter of 2024, along with year-over-year changes, showing regional performance variations Q2 2025 Net Sales by Geographic Region and Segment | Region/Segment | Q2 2025 Sales (Millions) | YoY Change | | :--- | :--- | :--- | | **Americas** | | | | Hydraulics | $54.2 | (9%) | | Electronics | $53.7 | (7%) | | Consolidated Americas | $107.9 | (8%) | | **EMEA** | | | | Hydraulics | $46.1 | 8% | | Electronics | $8.5 | (6%) | | Consolidated EMEA | $54.6 | 5% | | **APAC** | | | | Hydraulics | $40.6 | (6%) | | Electronics | $9.4 | 27% | | Consolidated APAC | $50.0 | (2%) | | **Total** | $212.5 | (3%) | - In the first half of 2025, consolidated sales in the Americas decreased **7%** year-over-year, EMEA decreased **5%**, and APAC decreased **2%**[42](index=42&type=chunk) [Non-GAAP Reconciliations](index=14&type=section&id=Non-GAAP%20Reconciliations) [Adjusted Operating Income & Margin Reconciliation](index=14&type=section&id=Adjusted%20Operating%20Income%20%26%20Margin) This section provides a reconciliation of GAAP operating income to non-GAAP adjusted operating income, detailing various adjustments for Q2 and H1 2025 and 2024, showing adjusted operating income of $31.8 million (15.0% margin) for Q2 2025 Adjusted Operating Income & Margin Reconciliation (Q2 & H1 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Operating Income | $21.9 (10.3%) | $26.0 (11.8%) | $39.0 (9.6%) | $46.4 (10.7%) | | Acquisition-Related Intangible Asset Amortization | $8.3 (3.9%) | $7.9 (3.6%) | $16.5 (4.0%) | $15.7 (3.6%) | | Acquisition and Financing-Related Expenses | $0.3 (0.2%) | $0.1 (0.0%) | $0.3 (0.1%) | $0.6 (0.1%) | | Restructuring Expenses | $0.8 (0.4%) | $1.7 (0.8%) | $1.2 (0.3%) | $3.2 (0.7%) | | Executive Transition Costs | $0.4 (0.2%) | $0.3 (0.1%) | $0.5 (0.1%) | $0.5 (0.1%) | | Non-GAAP Adjusted Operating Income | $31.8 (15.0%) | $36.0 (16.4%) | $58.0 (14.2%) | $66.7 (15.4%) | [Adjusted EBITDA & Margin Reconciliation](index=15&type=section&id=Adjusted%20EBITDA%20%26%20Margin) This section provides a reconciliation of net income to non-GAAP adjusted EBITDA, detailing various adjustments for Q2 and H1 2025 and 2024, showing adjusted EBITDA of $39.5 million (18.6% margin) for Q2 2025 Adjusted EBITDA & Margin Reconciliation (Q2 & H1 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $11.4 (5.3%) | $13.6 (6.2%) | $18.6 (4.6%) | $22.7 (5.3%) | | Interest Expense, Net | $7.0 (3.3%) | $8.5 (3.9%) | $14.4 (3.5%) | $16.7 (3.9%) | | Income Tax Provision | $3.5 (1.7%) | $4.0 (1.8%) | $5.8 (1.4%) | $6.8 (1.6%) | | Depreciation and Amortization | $15.9 (7.5%) | $16.0 (7.3%) | $31.9 (7.8%) | $31.7 (7.3%) | | EBITDA | $37.8 (17.8%) | $42.1 (19.1%) | $70.7 (17.3%) | $77.9 (18.0%) | | Acquisition and Financing-Related Expenses | $0.3 (0.2%) | $0.1 (0.0%) | $0.3 (0.1%) | $0.6 (0.1%) | | Restructuring Expenses | $0.8 (0.4%) | $1.7 (0.8%) | $1.2 (0.3%) | $3.2 (0.7%) | | Executive Transition Costs | $0.4 (0.2%) | $0.3 (0.1%) | $0.5 (0.1%) | $0.5 (0.1%) | | Adjusted EBITDA | $39.5 (18.6%) | $44.2 (20.1%) | $73.3 (18.0%) | $82.7 (19.1%) | [Adjusted Net Income & EPS Reconciliation](index=16&type=section&id=Adjusted%20Net%20Income%20%26%20EPS) This section provides a reconciliation of GAAP net income to non-GAAP adjusted net income and its diluted earnings per share, detailing various adjustments for Q2 and H1 2025 and 2024, showing adjusted diluted EPS of $0.59 for Q2 2025 Adjusted Net Income & EPS Reconciliation (Q2 & H1 2025 vs 2024) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Income | $11.4 ($0.34) | $13.6 ($0.41) | $18.6 ($0.56) | $22.7 ($0.68) | | Intangible Asset Amortization | $8.8 ($0.26) | $8.2 ($0.25) | $17.5 ($0.53) | $16.3 ($0.49) | | Acquisition and Financing-Related Expenses | $0.3 ($0.01) | $0.1 (-) | $0.3 ($0.01) | $0.6 ($0.02) | | Restructuring Expenses | $0.8 ($0.03) | $1.7 ($0.05) | $1.2 ($0.04) | $3.2 ($0.10) | | Executive Transition Costs | $0.4 ($0.01) | $0.3 ($0.01) | $0.5 ($0.01) | $0.5 ($0.01) | | Tax Impact | $(2.3) ($(0.07)) | $(2.4) ($(0.07)) | $(4.4) ($(0.13)) | $(4.7) ($(0.14)) | | Non-GAAP Adjusted Net Income | $19.5 ($0.59) | $21.5 ($0.64) | $34.3 ($1.03) | $39.1 ($1.17) | - Restructuring expenses primarily include the Helios Center of Engineering Excellence (HCEE) restructuring initiated in January 2025, involving the cessation of operations at the San Antonio office, reallocation of resources, and position eliminations, as well as European regional operational optimization activities[47](index=47&type=chunk) [Net Sales Growth Reconciliation](index=17&type=section&id=Net%20Sales%20Growth) This section provides a reconciliation of net sales growth at constant currency for Q2 and H1 2025, eliminating foreign exchange translation impacts, showing a consolidated organic sales growth rate of -4% at constant currency for Q2 2025 Net Sales Growth Reconciliation (Q2 & H1 2025) | Metric | Hydraulics (Q2 2025) | Electronics (Q2 2025) | Consolidated (Q2 2025) | Hydraulics (H1 2025) | Electronics (H1 2025) | Consolidated (H1 2025) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales (Millions) | $140.9 | $71.6 | $212.5 | $267.3 | $140.7 | $408.0 | | Foreign Currency Translation Impact (Millions) | $(1.5) | - | $(1.5) | $0.7 | $0.1 | $0.8 | | Organic Sales at Constant Currency (Millions) | $139.4 | $71.6 | $211.0 | $268.0 | $140.8 | $408.8 | | Net Sales Growth | -3% | -3% | -3% | -7% | -2% | -6% | | Net Sales Growth at Constant Currency | -4% | -3% | -4% | -7% | -2% | -5% | | Organic Net Sales Growth at Constant Currency | -4% | -3% | -4% | -7% | -2% | -5% | [Net Debt-to-Adjusted EBITDA Reconciliation](index=18&type=section&id=Net%20Debt-to-Adjusted%20EBITDA) This section provides the calculation of the net debt to adjusted EBITDA ratio as of June 28, 2025, showing a ratio of 2.6x based on total debt of $436.2 million and TTM adjusted EBITDA of $145.1 million Net Debt to Adjusted EBITDA Ratio (as of June 28, 2025) | Metric | Amount (Millions) | | :--- | :--- | | Current Portion of Long-Term Non-Revolving Debt, Net | 24.5 | | Revolving Credit Facility | 144.3 | | Long-Term Non-Revolving Debt, Net | 267.4 | | **Total Debt** | **436.2** | | Less: Cash and Cash Equivalents | 53.0 | | **Net Debt** | **383.2** | | Trailing Twelve Months Adjusted EBITDA | 145.1 | | **Net Debt to Adjusted EBITDA Ratio** | **2.6** |

Analyst's Disclosure:I/we have a beneficial long position in the shares of HTWSF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any i ...

Core Viewpoint - Helios Technologies (HLIO) is positioned as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating a positive earnings outlook and potential for continued stock price appreciation [1][2]. Earnings Estimate Revisions - The trend of increasing earnings estimate revisions reflects growing analyst optimism regarding Helios Technologies' earnings prospects, which is expected to positively influence its stock price [2]. - For the current quarter, Helios Technologies is projected to earn $0.49 per share, representing a year-over-year decline of 23.4%. However, the Zacks Consensus Estimate has increased by 6.38% due to one upward revision and no negative revisions in the last 30 days [6]. - For the full year, the earnings estimate stands at $1.90 per share, reflecting a 9.5% decrease from the previous year. Similar to the current quarter, the consensus estimate has risen by 6.15% following one upward revision and no negative revisions [7][8]. Zacks Rank and Performance - Helios Technologies currently holds a Zacks Rank 1 (Strong Buy), which is based on the positive estimate revisions and has historically shown strong performance, with Zacks 1 Ranked stocks averaging a 25% annual return since 2008 [3][9]. - The Zacks Rank system is designed to leverage earnings estimate revisions to guide investment decisions, with stocks rated Zacks Rank 1 and 2 significantly outperforming the S&P 500 [9]. Stock Performance - The stock of Helios Technologies has appreciated by 14.7% over the past four weeks, driven by favorable estimate revisions and positive earnings growth prospects, suggesting it may be a timely addition to investment portfolios [10].

OVERVIEW OF SYSTEM SALES JANUARY 18, 2024 SAFE HARBOR STATEMENT This presentation and oral statements made by management in connection herewith that are not historical facts are "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, forecas ...

Financial Performance & Outlook - Helios Technologies reported Q1 2024 net sales of $212 million, a decrease of 1% year-over-year[80] - The company anticipates 2024 revenue between $840 million and $860 million[121] - Helios projects 2024 net income to be between $50 million and $63 million[121] - Adjusted EBITDA for 2024 is expected to be in the range of $163 million to $180 million, with an adjusted EBITDA margin between 195% and 210%[121] - The company's net debt to pro forma adjusted EBITDA ratio was 308x at the end of Q1 2024[106] Segment Performance - Hydraulics segment sales in Q1 2024 were $1424 million, a 4% decrease year-over-year[38] - Electronics segment sales in Q1 2024 were $696 million, a 6% increase year-over-year[62] - The company expects Hydraulics revenue between $565 million and $580 million, representing 0% to 2% growth over 2023[111] - The company expects Electronics revenue between $275 million and $280 million, representing 2% to 4% growth over 2023[111] Regional Performance - Americas accounted for 55% of total sales in FY2023[11] - EMEA accounted for 24% of total sales in FY2023[11] - APAC accounted for 21% of total sales in FY2023[11]