Helios Technologies(HLIO) - 2025 Q3 - Quarterly Results

Financial Performance - Third quarter net sales increased to $220 million, a 13% growth compared to the prior year, with Hydraulics up 9% and Electronics up 21%[4] - Total net sales for Q3 2025 were $220.3 million, representing a 13% year-over-year growth compared to $194.5 million in Q3 2024[33] - Helios Technologies reported a year-over-year sales growth of 13% for the third quarter of 2025, with consolidated net sales reaching $220.3 million compared to $194.5 million in the same period of 2024[36] - The Hydraulics segment generated net sales of $141.3 million, up from $129.4 million, while the Electronics segment saw an increase to $79.0 million from $65.1 million[39] - Organic net sales growth in constant currency for Q3 2025 was 12%, with hydraulics segment sales at $141.3 million and electronics segment sales at $79.0 million[47] Profitability - Gross margin expanded by 200 basis points to 33.1%, despite tariff headwinds, with gross profit rising 21% to $73 million[4] - Non-GAAP adjusted operating income for Q3 2025 was $36.6 million, with a margin of 16.6%, compared to $32.2 million and 16.6% in Q3 2024[43] - The company's adjusted EBITDA for Q3 2025 was $45.1 million, representing a margin of 20.5%, up from $40.6 million and a margin of 20.9% in Q3 2024[44] - Net income for Q3 2025 was $10.3 million, with a net income margin of 4.7%, compared to $11.4 million and a margin of 5.9% in Q3 2024[44] - A goodwill write-down of $25.9 million related to the i3 Product Development business impacted operating income significantly[4] Cash Flow and Debt Management - The company generated $25.2 million in net cash from operations in Q3 2025, a decrease of 28% from the previous year due to increased accounts receivable[23] - Total debt decreased by 13% to $419.1 million as of September 27, 2025, down from $483.4 million a year earlier[23] - Cash and cash equivalents increased by 18% to $54.9 million compared to the same period last year[23] - The net debt-to-adjusted EBITDA leverage ratio improved to 2.4x from 2.8x year-over-year[23] - The company reported a net debt of $364.2 million as of September 27, 2025, with a net debt-to-adjusted EBITDA ratio of 2.4[49][50] Regional Sales Performance - Sales growth was observed across all regions: Americas up 11%, APAC up 14%, and EMEA up 18% year-over-year[8] - The Americas region accounted for 52% of total sales in Q3 2025, with a total of $114.2 million, showing an 11% increase year-over-year[41] - EMEA region sales for Q3 2025 were $51.0 million, an 18% increase year-over-year, representing 23% of total sales[41] - APAC region sales reached $55.1 million in Q3 2025, a 14% increase year-over-year, contributing 25% to total sales[41] Future Outlook - The company is tightening and raising the mid-point of its FY25 outlook, reflecting stronger-than-expected Q3 results[4] - The company expects to exceed the mid-point of its original full-year outlook for 2025 despite tariff headwinds and divestiture challenges[20] - Helios Technologies continues to focus on improving demand and expanding its market presence, particularly in the Hydraulics segment[38] - The company expects continued improvement in demand, supporting a positive outlook for future quarters[42] Shareholder Returns - The company paid its 115th consecutive quarterly cash dividend of $0.09 per share on October 21, 2025[23] - The company repurchased 50,000 shares for $2.7 million in Q3 2025[23] Impairments and Adjustments - The company reported a goodwill impairment of $25.9 million during the nine months ended September 27, 2025[37] - Goodwill impairment for the twelve months ended September 27, 2025, was $25.9 million, accounting for 3.2% of total income[43] Taxation - The effective tax rate for Q3 2025 was 19.8%, compared to 14.2% in the same period of 2024[13] Other Financial Metrics - Diluted Non-GAAP EPS increased by 22% to $0.72, the highest level since Q2 2023[4] - Total assets rose to $1,555.8 million, up from $1,505.4 million, driven by increases in current assets[35] - Total liabilities decreased slightly to $637.9 million from $641.0 million, indicating improved financial stability[35] - SEA expenses increased by 26% year-over-year, primarily due to higher benefit costs and adjustments from the previous CEO's termination[8] - The company's GAAP operating income for Q3 2025 was $1.3 million, with a margin of 0.6%, compared to $22.2 million and 11.4% in Q3 2024[43] - The company emphasized the importance of non-GAAP financial measures for better understanding operating performance, which should be considered alongside GAAP results[50]