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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]

Core Insights - Helios Towers plc has positive growth prospects driven by colocations on existing towers, supporting a buy rating following Q4 and Fiscal Year 2024 results [1] Group 1 - The company is experiencing growth due to the strategic use of existing tower infrastructure for colocations [1]

Financial Data and Key Metrics Changes - Sales for the first quarter of 2025 were $195 million, exceeding the top end of guidance by $5 million, but still below prior year levels due to ongoing end market weakness [9][18] - Adjusted EBITDA margin was 17.3%, with cash from operations increasing by 7% year over year to $19 million despite sales contraction [10][24] - Diluted EPS was $0.22, down 21% from the previous year, primarily due to an 8% decline in sales [20] Business Line Data and Key Metrics Changes - Hydraulic sales declined by 11% year over year, reflecting weakness in agriculture, mobile, and industrial end markets [21] - Electronics sales remained relatively unchanged, with growth in health and wellness and recreational markets offsetting declines in industrial and mobile sectors [23] - Gross margin for hydraulics contracted by 170 basis points, while electronics gross margin held steady [19][22] Market Data and Key Metrics Changes - Asia Pacific sales in the electronics segment increased by 24% year over year, driven by growth in the health and wellness end market [18] - Overall, sales declined in all regions compared to the previous year, highlighting persistent weakness in most end markets [18] Company Strategy and Development Direction - The company is refocusing on customer-centric initiatives to drive business success and improve shareholder returns [7][8] - A strategy to mitigate tariff impacts includes localizing production and leveraging existing manufacturing capabilities in China and the APAC region [30][31] - The company aims to capitalize on market share opportunities created by competitors relying on Chinese manufacturing [60][62] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the downstream effects of prolonged tariff escalations, including rising costs and pricing pressures [9] - Despite challenges, there are positive trends in order intake, with a focus on improving customer relationships and product offerings [12][13] - The company expects second quarter sales to range from $198 million to $206 million, indicating a sequential increase from the first quarter [35] Other Important Information - The company has reduced debt by 15% over the last twelve months and has a strong liquidity position with nearly $400 million available [11][27] - Capital expenditures for 2025 will focus on maintenance and productivity enhancements with evident returns on investment [26] Q&A Session Summary Question: Insights from the listening tour and specific actions taken - Management highlighted the importance of customer engagement and accountability, emphasizing a shift from a passive to a more aggressive sales approach [44][45] Question: Impact of tariffs on manufacturing and costs - The company is transferring manufacturing to mitigate tariff impacts, with minimal investment required due to existing operations in the region [49][50] Question: Competitive positioning around tariffs - Management sees market share gain opportunities due to competitors' reliance on Chinese imports, particularly in hydraulics and electronics [59][60] Question: Demand changes and guidance for Q2 - Management noted positive order intake trends and expects to see some revenue from tariff-related opportunities in Q2, but significant impacts are anticipated in the back half of the year [65][66] Question: Portfolio assessment and potential divestitures - The company is open to evaluating its portfolio for strategic fit and financial performance, focusing on debt reduction before considering acquisitions [85]

Financial Data and Key Metrics Changes - Sales for Q1 2025 were $195 million, exceeding the top end of guidance but below prior year levels due to continued end market weakness [10][19] - Adjusted EBITDA margin was 17.3%, with cash from operations increasing by 7% year over year to $19 million despite sales contraction [11][25] - Diluted EPS was $0.22, down 21% from the previous year, primarily due to an 8% decline in sales [21] Business Line Data and Key Metrics Changes - Hydraulic sales declined by 11% year over year, reflecting weakness in agriculture, mobile, and industrial end markets [22] - Electronics sales remained relatively unchanged, with growth in health and wellness and recreational markets offsetting declines in industrial and mobile sectors [24] Market Data and Key Metrics Changes - Asia Pacific sales in the electronics segment increased by 24% year over year, driven by a return to growth in the health and wellness end market [19] - Overall sales declined in all regions compared to the previous year, with foreign exchange negatively impacting sales by $2.3 million [19] Company Strategy and Development Direction - The company is refocusing on customer-centric initiatives to drive business success and improve shareholder returns [7][8] - A strategy to mitigate tariff impacts includes leveraging regional manufacturing capabilities and enhancing local production to reduce costs [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about prolonged tariff escalations affecting costs and end market demand but remains committed to long-term strategic decisions [9][30] - The company anticipates a sequential sales increase in Q2 2025, projecting sales between $198 million and $206 million [36] Other Important Information - The company has reduced debt by 15% over the last year and has maintained a strong liquidity position with nearly $400 million available [12][27] - The company is prioritizing capital expenditures for impactful projects with quick payback periods [12][26] Q&A Session Summary Question: Insights from the listening tour and specific actions taken - Management highlighted the importance of customer engagement and aggressive market strategies, moving from a passive to a more proactive approach [44][46] Question: Impact of tariffs on manufacturing and costs - Management indicated that transferring manufacturing to local regions is already in progress, with minimal investment required due to existing capabilities [49][51] Question: Competitive positioning around tariffs - Management sees significant market share gain opportunities due to competitors relying on Chinese manufacturing, which is now less cost-competitive [60][62] Question: Guidance for Q2 and demand changes - Management noted that order intake has exceeded sales for five consecutive months, indicating positive demand trends despite uncertainties [100][104]

Company Performance - Helios Technologies reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.36 per share, but down from $0.53 per share a year ago [1] - The earnings surprise for this quarter was 22.22%, following a previous surprise of 13.79% when earnings were $0.33 per share against an expectation of $0.29 [2] - The company achieved revenues of $195.5 million for the quarter, surpassing the Zacks Consensus Estimate by 4.32%, but down from $212 million in the same quarter last year [3] Market Outlook - Helios Technologies shares have declined approximately 37.9% since the beginning of the year, compared to a 3.9% decline in the S&P 500 [4] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $188.4 million, and for the current fiscal year, it is $1.52 on revenues of $734.1 million [8] Industry Context - The Manufacturing - General Industrial industry, to which Helios Technologies belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential challenges ahead [9] - The performance of Helios Technologies may be influenced by the overall outlook for the industry, as top-ranked industries tend to outperform lower-ranked ones significantly [9]

Q1 2025 Financial Performance - Revenue for Q1 2025 was $195 million, a decrease of 8% year-over-year[13] - Adjusted EBITDA margin was 173%, down 90 bps year-over-year[13] - Diluted Non-GAAP EPS was $044, a decrease of 17% year-over-year, but $008 above current consensus[13] Segment Performance - Hydraulics segment sales were $1264 million, an 11% decrease year-over-year[40] - Electronics segment sales were $691 million, a 1% decrease year-over-year[43] - Hydraulics segment operating income was $174 million, a 20% decrease year-over-year[40] - Electronics segment operating income was $80 million, a 13% increase year-over-year[43] Cash Flow, Debt, and Capital Allocation - Free cash flow for Q1 2025 was $129 million[45] - Total debt was $445 million, with liquidity of $399 million[54] - Net debt to adjusted EBITDA ratio was 27x[55] Outlook and Tariffs - Q2 2025 net sales are expected to be between $198 million and $206 million, representing a decrease of 10% to 6% relative to Q2 2024[64] - Q2 2025 adjusted EBITDA margin is expected to be between 175% and 185%, representing a decrease of 260 bps to 160 bps relative to Q2 2024[64] - Estimated total direct cost impacts from tariffs are approximately $15 million[57]

Financial Performance - First quarter net sales were $195.5 million, down 8% year-over-year, with Hydraulics segment sales declining 11% and Electronics segment sales down 1%[4] - Diluted EPS for the first quarter was $0.22, a decrease of 21% year-over-year, while diluted Non-GAAP EPS was $0.44, down 17% from the prior year[4] - The company reported a net income of $7.3 million for the first quarter of 2025, down 21% from $9.2 million in the first quarter of 2024[32] - Operating income decreased by 16% to $17.0 million in the first quarter of 2025, compared to $20.3 million in the same quarter of 2024[32] - The gross margin for the first quarter of 2025 was 30.6%, down from 31.7% in the first quarter of 2024[32] - The company achieved a GAAP net income of $7.3 million, translating to a net income margin of 3.7%[44] - Non-GAAP adjusted net income for Q1 2025 was $14.8 million, or $0.44 per diluted share, compared to $17.6 million, or $0.53 per diluted share in Q1 2024[44] Cash Flow and Debt Management - Cash generated from operations was $19.0 million, up 7% compared to the same period last year, with an 11% reduction in inventory across all businesses[4] - Total debt was reduced by $75.7 million, or 15%, to $445.6 million, marking the seventh consecutive quarter of debt reduction[4] - The net debt to adjusted EBITDA leverage ratio improved to 2.7x from 3.1x in the prior year period[4] - Cash flows from operating activities increased to $19.0 million, compared to $17.8 million in the same quarter last year[36] - Cash and cash equivalents at the end of the period were $45.9 million, up from $37.3 million at the end of the same quarter in 2024[36] - The net debt as of March 29, 2025, was $399.7 million, with a net debt-to-adjusted EBITDA ratio of 2.7[51] Operational Efficiency - Operating income increased by 23% compared to the previous quarter, reaching $17.0 million, with a sequential operating margin improvement of 130 basis points[4] - Selling, engineering, and administrative expenses decreased by 11% year-over-year, reflecting cost reduction actions across the business[8] - The company is focusing on selective capital expenditures and cost control measures to navigate the uncertain tariff environment[20] - The company is evaluating plans to move additional production activities to its Tijuana facility in 2025[45] - Restructuring activities related to the creation of new Regional Operational Centers of Excellence are complete, with further optimization plans for European operations ongoing[45] Market Performance - Sales in the APAC region increased by 24% year-over-year, while EMEA saw a 20% sequential increase[8] - Hydraulics segment net sales were $126.4 million, down 11% from $142.4 million in the previous year[38] - Electronics segment net sales remained relatively stable at $69.1 million, a slight decrease from $69.6 million year-over-year[38] - The impact of foreign currency translation on net sales was $2.3 million, with constant currency net sales showing a decline of 7%[49] Future Outlook - Adjusted EBITDA margin is projected to be between 17.5% and 18.5% for the second quarter of 2025[24] - Diluted Non-GAAP EPS is expected to range from $0.46 to $0.54 for the second quarter of 2025[24] - Helios Technologies aims to be a leading provider in niche markets through innovative product development and acquisitions[23] - The company is focused on investing in innovation and new product development while optimizing its manufacturing strategy to navigate tariff challenges[4] - Helios Technologies continues to focus on integrating recently acquired businesses, with no acquisition integration costs reported for Q1 2025[46]