Financial Data and Key Metrics Changes - Sales in Q3 2025 were $220 million, a 13% increase year-over-year, exceeding guidance of $215 million [19] - Adjusted EBITDA margin was above 20%, marking a return to growth after previous declines [7][8] - Gross profit increased 21% year-over-year to $73 million, with gross margin expanding 200 basis points to 33.1% [21] - Diluted EPS was $0.31, down 9% year-over-year, while diluted non-GAAP EPS was $0.72, up 22% [23] Business Segment Data and Key Metrics Changes - Electronics segment sales grew 21% year-over-year, driven by strong performance in innovation controls [19][25] - Hydraulics segment sales increased 9% year-over-year, supported by improving demand in mobile and agriculture markets [19][24] - Gross profit and gross margin for Hydraulics grew 12% and 90 basis points, respectively [24] Market Data and Key Metrics Changes - Year-over-year sales increased double digits across all three regions, with APAC growing 10% and The Americas 6% [20] - EMEA experienced a typical seasonal decline of 6% [20] - Foreign exchange positively impacted sales by $1.8 million compared to the previous year [20] Company Strategy and Development Direction - The company is focused on organic growth driven by innovation and has launched new products to capture adjacent markets [33] - Strategic initiatives include restructuring, optimizing operations, and investing in engineering resources [15][30] - The company aims to lower its leverage ratio to around two times by year-end 2025 [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in recreational and agricultural markets, indicating a potential upcycle [30][56] - The company expects Q4 2025 sales to be in the range of $192 million to $200 million, representing a 10% increase year-over-year [31] - There is confidence in entering 2026 with growth, supported by improved demand trends and healthier dealer inventory levels [86] Other Important Information - The company closed the sale of Custom Fluid Power, recording a gain of $21 million, while also writing down $25.9 million of goodwill related to i3 product development [14] - The new CFO, Michael Conway, is expected to contribute to the company's growth and financial improvements [17] Q&A Session Summary Question: Can you provide insight into recent commercial wins and visibility into 2026? - Management highlighted a focus on go-to-market strategies and recent wins in various segments, indicating positive sales and order levels [39][40] Question: What will it take to return to adjusted EBITDA levels seen in fiscal 2021? - Management noted that achieving mid-20s EBITDA margins will require increased volume and highlighted the importance of their go-to-market initiatives [45][46] Question: Is there any more portfolio reshaping needed? - Management stated that there are no imminent changes but will continue to evaluate the portfolio for performance [60][61] Question: Can you discuss the growth in the agricultural market? - Growth in agriculture is attributed to improved dealer inventory levels and positive trends in incoming orders, indicating a potential recovery [76][78] Question: What changes are being made to turn around the i3 operation? - The focus is on leveraging talented engineers from the i3 acquisition to benefit the broader Helios portfolio rather than pursuing standalone projects [92][95]