Helios Technologies(HLIO) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights CEO Commentary 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] - 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] - 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] Q2 2025 Key Financial & Operational Highlights 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] - 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] Consolidated Financial Results Overview of Q2 2025 Consolidated Performance 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 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] - Hydraulics sales decline primarily reflects weakness in the industrial and mobile markets[10] Profitability and Margins 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] - SEA expenses increased primarily due to Electronics leadership changes, higher-than-anticipated performance compensation accruals, and annual salary adjustments[10] Non-Operating Items & Net Income 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] - GAAP net income and diluted EPS decreased primarily due to lower sales and unfavorable changes in gross margin and operating expenses[14] Segment Performance Review Hydraulics Segment 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] - Gross margin expansion primarily due to lower material and direct labor costs, partially offset by lower sales volume and net tariff impacts[15] Electronics Segment 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] - 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] Financial Position & Cash Flow Cash Flow Generation 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 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] - Inventory increased 4% year-over-year to prepare for sequential sales growth[20] Capital Allocation 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] Outlook Full Year 2025 and Q3 2025 Guidance 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] - 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] Company Information About Helios Technologies 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] - Company products are sold in over 90 countries, serving diverse end markets including construction, material handling, agriculture, energy, recreational vehicles, marine, and health[25] - 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] Webcast & Replay Information 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] - The conference call replay will be available from 1:00 PM ET on the day of the call until Tuesday, August 19, 2025[24] Forward-Looking Statements & Non-GAAP Measures Forward-Looking Information 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] - 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] - The company undertakes no obligation to update any forward-looking statements[27] Explanation of Non-GAAP Financial Measures 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][30][54] - 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][54] - 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][54] Financial Statements (GAAP & Non-GAAP Reconciliations) Consolidated Statements of Operations 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 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 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] Segment Data 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 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] Non-GAAP Reconciliations Adjusted Operating Income & Margin Reconciliation 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 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 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] Net Sales Growth Reconciliation 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 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 |