Helios Technologies(US:HLIO)2024-08-05 21:02Financial Performance - Net sales for Q2 2024 were $219.9 million, a 4% increase from Q1 2024, with Hydraulics up 2% and Electronics up 7%[1] - Diluted EPS for Q2 2024 was $0.41, with Non-GAAP EPS at $0.64, reflecting a 21% increase over Q1 2024[1] - Gross profit for Q2 2024 was $70.6 million, down 7% year-over-year, with a gross margin of 32.1%, a decrease of 120 basis points[2] - Operating income for Q2 2024 was $26.0 million, down 12% year-over-year, with an operating margin of 11.8%, also down 120 basis points[2] - Net income for Q2 2024 was $13.6 million, a 19% decline from $16.8 million in Q2 2023, leading to a diluted net income per share of $0.41[20] - Adjusted EBITDA for Q2 2024 was $44.2 million, with a margin of 20.1%, down from $50.1 million and 22.0% in Q2 2023[30] - Non-GAAP adjusted operating income for Q2 2024 was $36.0 million, reflecting a 16.4% margin compared to 18.5% in Q2 2023[28] Cash Flow and Debt Management - Cash generated from operations in Q2 2024 was $33.8 million, up 30% year-over-year, improving the cash conversion cycle[1] - Total debt was reduced by $18.6 million, marking the fourth consecutive quarter of debt reduction[1] - Cash and cash equivalents increased by 21% sequentially to $45.0 million as of June 29, 2024, reflecting improved cash management[10] - Total current assets increased to $422.6 million as of June 29, 2024, compared to $396.7 million at the end of 2023[21] - Total liabilities decreased to $714.4 million in Q2 2024 from $735.8 million at the end of 2023[21] - Total debt amounts to $502.7 million, with net debt at $457.7 million after accounting for cash and cash equivalents of $45.0 million[32] Sales and Market Segments - Total net sales for the second quarter 2024 were $835.6 million, with guidance for the full year adjusted to a range of $825 million to $840 million[13] - Electronics segment sales decreased by 1% year-over-year to $74.2 million, while Hydraulics segment sales fell 4% to $145.7 million[5][8] - The Americas segment contributed $117.3 million in Q2 2024, down 5% year-over-year, accounting for 53% of total sales[26] - EMEA segment sales were $51.8 million in Q2 2024, a decline of 11% year-over-year, representing 24% of total sales[26] - APAC segment sales increased to $50.8 million, a 12% rise year-over-year, making up 23% of total sales[26] Operational Efficiency and Future Outlook - The company is moderating its full-year 2024 outlook due to softening end market conditions, focusing on operational efficiencies and cost discipline[1] - The company anticipates moderating sales expectations for the second half of 2024 due to softening demand and negative U.S. PMI data[12] - The company aims to maintain its adjusted EBITDA margin range despite the anticipated sales moderation, focusing on operational efficiencies and cost management[12] - The company is focusing on new product development and market expansion strategies to drive future growth[28] - Helios Technologies continues to evaluate potential acquisitions to enhance its market position and product offerings[28] Inventory and Capital Expenditures - Inventory decreased by 4% to $206.3 million from the first quarter of 2024, indicating more disciplined financial management[10] - Capital expenditures were $8.1 million in the second quarter 2024, representing 3.7% of sales, down from 4.6% in the previous year[10] - Capital expenditures for the second quarter were $13.6 million, down from $19.6 million in the same period last year[22] Dividends and Shareholder Returns - The company paid a cash dividend of $0.09 per share on July 19, 2024, marking the 110th consecutive quarterly dividend[11] - The company declared dividends of $0.09 per share for Q2 2024, consistent with the previous quarter[20] Restructuring and Operational Changes - The company incurred restructuring charges of $1.7 million in Q2 2024 related to the establishment of new Regional Operational Centers of Excellence[30] - Helios Technologies continues to optimize its European operations by transitioning some manufacturing to its Roncolo, Italy location[30] - The company anticipates ongoing improvements in margins and cash flow as it completes restructuring and integration activities[29]