Helios Technologies(US:HLIO)2024-11-05 21:41Financial Performance - Generated $34.8 million in cash from operations, up 195% over the prior-year period, reflecting disciplined working capital initiatives[1] - Delivered net sales of $194.5 million in the quarter, a decrease of 3% compared to $201.4 million in the prior-year period[2] - Achieved diluted EPS of $0.34 in 3Q24, up 209% from $0.11 in the prior-year period, and diluted Non-GAAP EPS of $0.59, up 34% from $0.44[2] - Expanded gross margin by 150 basis points to 31.1%, driven by improved efficiencies and cost adjustments despite lower net sales[2] - Operating income surged by 61% to $22.2 million, compared to $13.8 million in the prior year, resulting in an operating margin of 11.4%[18] - Net income for the quarter was $11.4 million, a significant increase of 226% from $3.5 million in the same quarter last year[18] - Basic and diluted net income per share both reached $0.34, up 209% from $0.11 in the previous year[18] - Non-GAAP adjusted operating margin increased to 16.6%, up 290 basis points from the prior-year period[2] - Non-GAAP adjusted net income for Q3 2024 was $19.7 million, or $0.59 per diluted share, compared to $14.4 million, or $0.44 per diluted share in Q3 2023[29] Debt and Cash Management - Reduced total debt by $19.3 million, marking the fifth consecutive quarter of debt reduction, with a net debt leverage ratio improved to 2.8x from 3.0x[1] - Total debt decreased to $483.4 million, down 11% from $544.5 million at September 30, 2023[10] - Cash and cash equivalents increased to $46.7 million, up 33% compared to the same period last year[10] - The company reported a net debt of $436.7 million, with a net debt to TTM adjusted EBITDA ratio of 2.8[31] Operational Efficiency - Selling, engineering, and administrative expenses decreased by $7.3 million, or 19%, compared to the prior-year period[3] - Adjusted EBITDA margin expanded by 320 basis points to 20.9% compared to the prior-year period[3] - The company aims to protect margins through operational efficiencies and disciplined cost control amid challenging market conditions[11] - The company achieved operational efficiency and improved working capital management initiatives[25] - The company is focusing on operational efficiency and working capital management initiatives to enhance performance moving forward[27] Market Performance and Outlook - Sales in the APAC region grew 16%, while there was an 11% decline in the Americas and a 3% decline in EMEA compared to the prior-year period[2] - The company updated its 2024 outlook to reflect weaker end market conditions and hurricane impacts, while maintaining focus on operational efficiencies and cost discipline[1] - Total net sales outlook for 2024 was updated to $800 - $805 million, down from the previous outlook of $825 - $840 million[12] - Net income outlook for 2024 was revised to $40 - $42 million, compared to the previous range of $45 - $52 million[12] - Adjusted EBITDA margin for 2024 is expected to be between 19.0% and 19.6%, down from the previous range of 19.5% to 21.0%[12] Segment Performance - Hydraulics segment net sales for the nine months ended September 28, 2024, were $417.5 million, down from $432.1 million in the same period of 2023[21] - Electronics segment gross profit margin improved to 30.1% in Q3 2024, compared to 26.8% in Q3 2023[21] - The Americas segment contributed $334.2 million in year-to-date sales for 2024, down 5% compared to the previous year[25] - EMEA's consolidated sales for Q3 2024 were $43.2 million, a decrease of 3% year-over-year[25] - APAC's consolidated sales increased by 16% in Q3 2024, totaling $48.3 million[25] Capital Expenditures and Investments - Capital expenditures were $6.0 million in Q3 2024, representing 3.0% of sales[10] - The company reported a net cash used in investing activities of $22.1 million for the nine months ended September 28, 2024, significantly improved from $144.5 million in the same period of 2023[20] - Borrowings on long-term non-revolving debt amounted to $126.8 million in Q3 2024, compared to $160.0 million in Q3 2023[20] Dividends - The company paid its 111th consecutive quarterly cash dividend of $0.09 per share[10] - The company declared dividends of $0.09 per share, consistent with the previous quarter[18]