- Organic growth of 37% achieved in the quarter driven by
industry-best lead times, flexibility and new products
- Net income grew to $30.7 million, up 138% over the
prior-year period and up 36% over the trailing first
quarter
- Operating momentum gained from manufacturing strategies;
protected profitability with targeted pricing actions; Adjusted
EBITDA1 margin expanded 310 basis points over prior-year period to
25.7%
- Diluted EPS of $0.95 up 138% from last year; Non-GAAP Cash
EPS of $1.20 up 118%
- Strong cash generation and free cash flow; further reduced
net debt to adjusted EBITDA leverage ratio to 2.16x2
- Raising revenue and margin expectations for 2021 even while
anticipating continued supply chain challenges and material cost
headwinds in second half
Helios Technologies, Inc. (Nasdaq: HLIO) (“Helios” or the
“Company”), a global leader in highly engineered motion control and
electronic controls technology for diverse end markets, today
reported financial results for the second quarter ended July 3,
2021. Results include BWG Holdings I Corp. (known as “Balboa Water
Group” or “Balboa acquisition”), from the date of its acquisition
on November 6, 2020.
Josef Matosevic, the Company’s President and Chief Executive
Officer, commented, “We delivered excellent results in the quarter
on all levels. The Helios team is executing very well on our plans
to drive organic growth, generate cash, deliver top tier adjusted
EBITDA margins and meet the accelerated goal that we recently
outlined at our investor day to achieve $1 billion in revenue two
years earlier than planned, by 2023. We believe we are gaining
market share as we are providing best in class industry lead times,
remaining agile in addressing customer requirements, and
accelerating innovative new products. In addition, our
manufacturing and operating strategies are gaining traction as we
navigate supply chain challenges, material cost increases, and
labor shortages to outpace the competition, delight our customers
and protect our margins.”
He concluded, “Following the end of the quarter, we successfully
closed the NEM acquisition. This acquisition accelerates the
electrification of our global hydraulics product offering while
leveraging the know-how of our Helios Center of Engineering
Excellence. We are also advancing our electronics offering as a
systems integrator in select niche markets. We believe our unique
market position as a pure play electronics/hydraulics company
provides us with competitive advantages as we pursue the many
opportunities available to us.”
____________________________________
1
Adjusted EBITDA is a non-GAAP measure. See
comments regarding the use of non-GAAP measures and the
reconciliation of GAAP to non-GAAP measures in the tables of this
release
2
On a pro-forma basis for Balboa Water
Group
Second Quarter 2021 Consolidated Results
($ in millions, except per share data)
Q2 2021 Q2
2020 Change % Change Net sales
$
223.4
$
119.3
$
104.1
87
%
Gross profit
$
82.2
$
44.7
$
37.5
84
%
Gross margin
36.8
%
37.5
%
(70
)
bps Operating income
$
42.1
$
16.7
$
25.4
152
%
Operating margin
18.8
%
14.0
%
480
bps Non-GAAP adjusted operating margin
23.2
%
19.3
%
390
bps Net income
$
30.7
$
12.9
$
17.8
138
%
Diluted EPS
$
0.95
$
0.40
$
0.55
138
%
Non-GAAP cash net income
$
38.6
$
17.7
$
20.9
118
%
Non-GAAP cash EPS
$
1.20
$
0.55
$
0.65
118
%
Adjusted EBITDA
$
57.5
$
27.0
$
30.5
113
%
Adjusted EBITDA margin
25.7
%
22.6
%
310
bps
See the attached tables for additional important disclosures
regarding Helios’s use of non-GAAP adjusted operating income,
non-GAAP adjusted operating margin, non-GAAP cash net income,
non-GAAP cash earnings per share, adjusted EBITDA (earnings before
net interest expense, income taxes, depreciation and amortization,
and certain non-recurring charges) and adjusted EBITDA margin
(adjusted EBITDA as a percentage of sales) as well as
reconciliations of GAAP operating income to non-GAAP adjusted
operating income and non-GAAP adjusted operating margin and GAAP
net income to non-GAAP cash net income, non-GAAP cash earnings per
share, adjusted EBITDA and Adjusted EBITDA margin. Helios believes
that, when used in conjunction with measures prepared in accordance
with GAAP, the non-GAAP measures described above help improve the
understanding of its operating performance.
Sales
- Sales reflected strong demand across all markets, in particular
agriculture, construction equipment, recreation, and health &
wellness. Results included $60.2 million in sales from
acquisitions. (See the table in this release that provides acquired
revenue by segment by quarter).
- Strength in demand across all regions as markets recovered from
the impacts of the COVID-19 pandemic.
- Foreign currency translation adjustment on sales: $6.9 million
favorable.
Profits and margins
- Gross profit and margin drivers: gross profit benefitted from
increased volume during the quarter. Gross margin was driven by
improved leverage on higher volume and manufacturing labor
efficiencies. These tailwinds were offset by higher freight and raw
material costs given the challenges with global supply chains. In
addition, the business model of the Balboa acquisition has lower
gross margins but higher operating margins.
- Selling, engineering and administrative (“SEA”) expenses: as a
percentage of sales, improved 530 basis points to 14.5% compared
with the 2020 second quarter and 40 basis points sequentially,
reflecting both the business model of the Balboa acquisition and
continued cost management initiatives.
- Amortization of intangible assets: $7.7 million was up from
$4.4 million in the prior year reflecting the acquisition.
Non-operating items
- Net interest expense: $4.4 million in the quarter, up $1.5
million compared with the prior-year period due to higher debt
balances.
- Effective tax rate: 17.6% compared with 4.7%, or 22.7%
excluding certain one-time Italian tax benefits, in the prior-year
period.
Net income, earnings per share, non-GAAP
cash earnings per share and adjusted EBITDA
- GAAP net income and earnings per share: $30.7 million and $0.95
per share.
- Non-GAAP cash earnings per share: $1.20 compared with $0.55
last year on strong demand, operational efficiencies, and
better-than-expected performance of the Balboa acquisition.
- Adjusted EBITDA margin: improved 310 and 60 basis points to
25.7% compared with the prior-year and sequential period,
respectively, due to higher volume and operational
efficiencies.
First Half 2021 Consolidated Results
($ in millions, except per share data)
2021
2020
Change % Change Net sales
$
428.3
$
248.8
$
179.5
72
%
Gross profit
$
157.5
$
96.6
$
60.9
63
%
Gross margin
36.8
%
38.8
%
(200
)
bps Operating income
$
76.7
$
6.7
$
70.0
1045
%
Operating margin
17.9
%
2.7
%
1520
bps Non-GAAP adjusted operating margin
23.0
%
19.9
%
310
bps Net income (loss)
$
53.3
$
(4.3
)
$
57.6
NM
Diluted EPS
$
1.65
$
(0.13
)
$
1.78
NM
Non-GAAP cash net income
$
70.4
$
35.7
$
34.7
97
%
Non-GAAP cash EPS
$
2.18
$
1.11
$
1.07
96
%
Adjusted EBITDA
$
108.8
$
57.4
$
51.4
90
%
Adjusted EBITDA margin
25.4
%
23.1
%
230
bps NM = Not meaningful
See the attached tables for additional important disclosures
regarding Helios’s use of non-GAAP adjusted operating income,
non-GAAP adjusted operating margin, non-GAAP cash net income,
non-GAAP cash earnings per share, adjusted EBITDA (earnings before
net interest expense, income taxes, depreciation and amortization,
and certain non-recurring charges) and adjusted EBITDA margin
(adjusted EBITDA as a percentage of sales) as well as
reconciliations of GAAP operating income to non-GAAP adjusted
operating income and non-GAAP adjusted operating margin and GAAP
net income to non-GAAP cash net income, non-GAAP cash earnings per
share, adjusted EBITDA and Adjusted EBITDA margin. Helios believes
that, when used in conjunction with measures prepared in accordance
with GAAP, the non-GAAP measures described above help improve the
understanding of its operating performance.
Sales
- Sales reflected strong demand across all regions and markets,
in particular agriculture, construction equipment, recreation, and
health & wellness. Results included $116.5 million in sales
related to acquisitions. (See the table in this release that
provides acquired revenue by segment by quarter).
- Foreign currency translation adjustment on sales: $12.7 million
favorable.
Profits and margins
- Gross profit and margin drivers: gross profit and margin were
driven by higher volume and the mix of products sold offset by the
headwinds related to supply chain challenges resulting in higher
raw material and freight costs, and the business model of the
Balboa acquisition.
- Selling, engineering and administrative (“SEA”) expenses: 14.7%
as a percentage of sales, improved 510 basis points compared with
the prior-year period, reflecting both the lower SEA expenses
relative to sales for the acquisition and continued cost
containment initiatives.
- Amortization of intangible assets: increased $9.1 million to
$17.9 million from the prior year reflecting the Balboa
acquisition.
- Goodwill impairment charge: last year’s first quarter included
a $31.9 million impairment charge resulting from weakened market
outlook primarily due to the COVID-19 pandemic.
Non-operating items
- Net interest expense: $3.3 million increase to $9.2 million
compared with the prior-year period reflecting higher debt
balances.
- Effective tax rate: 20.1% compared with 15.0% in prior year,
excludes non-taxable goodwill impairment charge, included certain
one-time benefits in the second quarter of 2020 that reduced the
effective tax rate for the period.
Net income, earnings per share, non-GAAP
cash earnings per share and adjusted EBITDA
- GAAP net income and earnings per share: $53.3 million and $1.65
per share.
- Non-GAAP cash earnings per share: $2.18 compared with $1.11 in
the prior-year period driven by strong demand, operational
efficiencies, and strong performance of the Balboa
acquisition.
- Adjusted EBITDA margin: 25.4%, up 230 basis points compared
with the prior-year period due higher volume and operational
efficiencies.
Hydraulics Segment Review
(Refer to sales by geographic region and segment data in
accompanying tables)
($ in millions)
Hydraulics
Three Months Ended Q2 2021 Q2 2020
Change % Change Net Sales Americas
$
41.7
$
34.2
$
7.5
22
%
EMEA
46.6
31.2
15.4
49
%
APAC
44.7
36.7
8.0
22
%
Total Segment Sales
$
133.0
$
102.1
$
30.9
30
%
Gross Profit
$
50.9
$
37.5
$
13.4
36
%
Gross Margin
38.3
%
36.7
%
160
bps SEA Expenses
$
18.6
$
15.5
$
3.1
20
%
Operating Income
$
32.3
$
22.0
$
10.3
47
%
Operating Margin
24.3
%
21.5
%
280
bps
Second Quarter Hydraulics Segment
Review
- Higher sales in all regions were driven by demand from the
construction, agriculture, mobile and industrial equipment end
markets; foreign currency exchange rates had a $6.7 million
favorable adjustment on sales.
- Gross margin of 38.3%, up 160 basis points, was driven by
improved leverage on higher volume and production labor
efficiencies.
- Operating margin improved 280 basis points, reflecting
disciplined cost management efforts.
Electronics Segment Review
(Refer to sales by geographic region and segment data in
accompanying tables)
($ in millions)
Electronics
Three Months Ended Q2 2021 Q2 2020
Change % Change Net Sales Americas
$
64.1
$
13.4
$
50.7
378
%
EMEA
11.0
1.9
9.1
479
%
APAC
15.3
1.9
13.4
705
%
Total Segment Sales
$
90.4
$
17.2
$
73.2
426
%
Gross Profit
$
31.2
$
7.2
$
24.0
333
%
Gross Margin
34.5
%
42.1
%
(760
)
bps SEA Expenses
$
11.6
$
6.3
$
5.3
84
%
Operating Income
$
19.6
$
0.9
$
18.7
2,078
%
Operating Margin
21.7
%
5.5
%
1620
bps
Second Quarter Electronics Segment
Review
- Higher sales included $60.2 million related to the acquisition.
Strong demand from health & wellness and recreational markets
drove sales despite headwinds from supply chain constraints.
- Gross margin reflects the different business model of the
Balboa acquisition, which has lower gross margins that are offset
by a lower SEA expense structure. Additionally, raw material,
freight, and logistics costs increased as a result of materials
shortages and efforts to meet customer requirements on a timely
basis.
- Operating margin of 21.7% demonstrates the business model of
the Balboa acquisition, which has an inherently lower operating
expense structure, and higher volume in the organic business. SEA
expenses increased due to the incremental expenses from the
acquisition.
Balance Sheet and Cash Flow Review
- Total debt was reduced by $25.3 million to $437.1 million from
$462.4 million at January 2, 2021.
- Cash and cash equivalents at July 3, 2021 were $34.4 million,
up $9.2 million from the end of 2020.
- Pro-forma net debt-to-adjusted EBITDA improved to 2.16x at the
end of the second quarter 2021 compared with 3.0x (pro-forma for
Balboa) at the end of 2020 demonstrating the Company’s ability to
rapidly de-lever the balance sheet following an acquisition. At the
end of the second quarter 2021, the Company had $161.4 million
available on its revolving lines of credit.
- Net cash provided by operations increased $9.2 million, or
36.4%, to $34.5 million in the second quarter 2021 compared with
the prior-year period.
- Capital expenditures were $5.3 million in the quarter, or
approximately 2% of sales. The Company continues to expect to spend
between $30 to $32 million in capital investments in 2021.
- Paid 99th sequential quarterly cash dividend on July 20,
2021.
2021 Outlook
The following provides the Company’s expectations for 2021. This
assumes constant currency, using quarter end rates, and that
markets served are not further impacted by the global pandemic.
Previous 2021Guidance providedon 5/10/21 Updated
2021Guidance % Change atMid-Point fromPrevious Guidance
Consolidated revenue $740 - $750 million $800 - $830 million
9%
Adjusted EBITDA $170 - $180 million $188 - $203 million
12%
Adjusted EBITDA margin 23% - 24% 23.5% - 24.5%
50 bps
Interest expense $16 - $18 million $16 - $18 million
unchanged
Effective tax rate 24% - 26% 22% - 24%
-200 bps
Depreciation $22 - $24 million $22 - $23 million
-2%
Amortization $30 - $31 million $32 - $33 million
7%
Capital expenditures $30 - $35 million $30 - $32 million
-5%
Capital expenditures % total revenue ~4% of sales ~4% of sales
unchanged
Non-GAAP Cash EPS $3.30 - $3.50 $3.60 -$3.80
9%
Webcast
The Company will host a conference call and webcast tomorrow,
August 10, 2021 at 9:00 a.m. Eastern Time to review its financial
and operating results and discuss its corporate strategies and
outlook. A question-and-answer session will follow. The conference
call can be accessed by calling (201) 689-8573. The audio webcast
will be available at www.heliostechnologies.com.
A telephonic replay will be available from approximately 12:00
p.m. ET on the day of the call through Tuesday, August 17, 2021. To
listen to the archived call, dial (412) 317-6671 and enter
conference ID number 13721131. The webcast replay will be available
in the investor relations section of the Company’s website at
www.heliostechnologies.com, where a transcript will also be posted
once available.
About Helios Technologies
Helios Technologies is a global leader in highly engineered
motion control and electronic controls technology for diverse end
markets, including construction, material handling, agriculture,
energy, recreational vehicles, marine, health and wellness. Helios
sells its products to customers in over 90 countries around the
world. Its strategy for growth is to be the leading provider in
niche markets, with premier products and solutions through
innovative product development and acquisition. The Company has
paid a cash dividend to its shareholders every quarter since
becoming a public company in 1997. For more information please
visit: www.heliostechnologies.com.
FORWARD-LOOKING INFORMATION
This news release contains “forward‐looking statements” within
the meaning of Section 21E of the Securities Exchange Act of 1934.
Forward‐looking statements involve risks and uncertainties, and
actual results may differ materially from those expressed or
implied by such statements. They include statements regarding
current expectations, estimates, forecasts, projections, our
beliefs, and assumptions made by Helios Technologies, Inc.
(“Helios” or the “Company”), its directors or its officers about
the Company and the industry in which it operates, and assumptions
made by management, and include among other items, (i) the
Company’s strategies regarding growth, including its intention to
develop new products and make acquisitions; (ii) the effectiveness
of creating the Center of Engineering Excellence; (iii) the
Company’s financing plans; (iv) trends affecting the Company’s
financial condition or results of operations; (v) the Company’s
ability to continue to control costs and to meet its liquidity and
other financing needs; (vi) the declaration and payment of
dividends; and (vii) the Company’s ability to respond to changes in
customer demand domestically and internationally, including as a
result of standardization. In addition, we may make other written
or oral statements, which constitute forward-looking statements,
from time to time. Words such as “may,” “expects,” “projects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” variations of such words, and similar expressions are
intended to identify such forward-looking statements. Similarly,
statements that describe our future plans, objectives or goals also
are forward-looking statements. These statements are not
guaranteeing future performance and are subject to a number of
risks and uncertainties. Our actual results may differ materially
from what is expressed or forecasted in such forward-looking
statements, and undue reliance should not be placed on such
statements. All forward-looking statements are made as of the date
hereof, and we undertake no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Factors that could cause the actual results to differ materially
from what is expressed or forecasted in such forward‐looking
statements include, but are not limited to, (i) conditions in the
capital markets, including the interest rate environment and the
availability of capital; (ii) our failure to realize the benefits
expected from the Balboa acquisition, our failure to promptly and
effectively integrate the Balboa acquisition and the ability of
Helios to retain and hire key personnel, and maintain relationships
with suppliers (iii) risks related to health epidemics, pandemics
and similar outbreaks and similar outbreaks, including, without
limitation, the current COVID-19 pandemic, which may among other
things, adversely affect our supply chain and material costs and
have material adverse effects on our business, financial position,
results of operations and/or cash flows; (iv) changes in the
competitive marketplace that could affect the Company’s revenue
and/or cost bases, such as increased competition, lack of qualified
engineering, marketing, management or other personnel, and
increased labor and raw materials costs; and (v) new product
introductions, product sales mix and the geographic mix of sales
nationally and internationally. Further information relating to
factors that could cause actual results to differ from those
anticipated is included but not limited to information under the
heading Item 1. “Business” and Item 1A. “Risk Factors” in the
Company’s Form 10-K for the year ended January 2, 2021.
This news release will discuss some historical non-GAAP
financial measures, which the Company believes are useful in
evaluating its performance. The determination of the amounts that
are excluded from these non-GAAP measures is a matter of management
judgment and depends upon, among other factors, the nature of the
underlying expense or income recognized in a given period. You
should not consider the inclusion of this additional information in
isolation or as a substitute for results prepared in accordance
with GAAP.
This news release also presents forward-looking statements
regarding non-GAAP Adjusted EBITDA margin. The Company is unable to
present a quantitative reconciliation of these forward-looking
non-GAAP financial measures to their most directly comparable
forward-looking GAAP financial measures because such information is
not available, and management cannot reliably predict the necessary
components of such GAAP measures without unreasonable effort or
expense. In addition, the Company believes that such
reconciliations would imply a degree of precision that would be
confusing or misleading to investors. The unavailable information
could have a significant impact on the Company’s 2021 financial
results. These non-GAAP financial measures are preliminary
estimates and are subject to risks and uncertainties, including,
among others, changes in connection with quarter-end and year-end
adjustments. Any variation between the Company’s actual results and
preliminary financial data set forth above may be material.
Financial Tables Follow:
HELIOS TECHNOLOGIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended Six Months Ended July
3,2021 June 27,2020 % Change July 3,2021
June 27,2020 % Change Net sales
$
223,413
$
119,294
87
%
$
428,258
$
248,777
72
%
Cost of sales
141,261
74,575
89
%
270,738
152,208
78
%
Gross profit
82,152
44,719
84
%
157,520
96,569
63
%
Gross margin
36.8
%
37.5
%
36.8
%
38.8
%
Selling, engineering and administrative expenses
32,410
23,600
37
%
62,971
49,264
28
%
Amortization of intangible assets
7,680
4,417
74
%
17,878
8,765
104
%
Goodwill impairment
-
-
NM
-
31,871
NM
Operating income
42,062
16,702
152
%
76,671
6,669
NM
Operating margin
18.8
%
14.0
%
17.9
%
2.7
%
Interest expense, net
4,400
2,891
52
%
9,151
5,842
57
%
Foreign currency transaction loss, net
503
283
78
%
967
408
137
%
Other non-operating income, net
(110
)
(16
)
NM
(111
)
(110
)
1
%
Income before income taxes
37,269
13,544
175
%
66,664
529
NM
Income tax provision
6,575
636
NM
13,382
4,844
176
%
Net income (loss)
$
30,694
$
12,908
138
%
$
53,282
$
(4,315
)
NM
Basic and diluted net income (loss) per common share
$
0.95
$
0.40
138
%
$
1.65
$
(0.13
)
NM
Basic and diluted weighted average shares outstanding
32,237
32,081
32,215
32,071
Dividends declared per share
$
0.09
$
0.09
$
0.18
$
0.18
NM = Not meaningful
HELIOS TECHNOLOGIES
CONSOLIDATED BALANCE
SHEETS
(In thousands, except per
share data)
July 3, 2021
January 2, 2021
Assets (Unaudited) Current assets: Cash and cash
equivalents
$
34,371
$
25,216
Restricted cash
41
41
Accounts receivable, net of allowance for credit losses of $1,319
and $1,493
134,018
97,623
Inventories, net
132,318
110,372
Income taxes receivable
1,916
1,103
Other current assets
21,761
19,664
Total current assets
324,425
254,019
Property, plant and equipment, net
163,201
163,177
Deferred income taxes
3,551
6,645
Goodwill
436,233
443,533
Other intangible assets, net
401,483
419,375
Other assets
11,499
10,230
Total assets
$
1,340,392
$
1,296,979
Liabilities and shareholders’ equity Current liabilities:
Accounts payable
$
74,553
$
59,477
Accrued compensation and benefits
23,706
22,985
Other accrued expenses and current liabilities
27,299
24,941
Current portion of long-term non-revolving debt, net
15,662
16,229
Dividends payable
2,902
2,891
Income taxes payable
6,868
1,489
Total current liabilities
150,990
128,012
Revolving line of credit
238,777
255,909
Long-term non-revolving debt, net
182,272
189,932
Deferred income taxes
76,417
78,864
Other noncurrent liabilities
33,591
36,472
Total liabilities
682,047
689,189
Commitments and contingencies
-
-
Shareholders’ equity: Preferred stock, par value $0.001,
2,000 shares authorized, no shares issued or outstanding
-
-
Common stock, par value $0.001, 100,000 shares authorized, 32,249
and 32,121 issued and outstanding
32
32
Capital in excess of par value
379,299
371,778
Retained earnings
317,799
270,320
Accumulated other comprehensive loss
(38,785
)
(34,340
)
Total shareholders’ equity
658,345
607,790
Total liabilities and shareholders’ equity
$
1,340,392
$
1,296,979
HELIOS TECHNOLOGIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
July 3, 2021
June 27, 2020
Cash flows from operating activities: Net income
(loss)
$
53,282
$
(4,315
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization
28,142
17,021
Goodwill Impairment
-
31,871
Stock-based compensation expense
4,183
2,447
Amortization of debt issuance costs
249
358
Provision (benefit) for deferred income taxes
3,249
(2,370
)
Forward contract gains, net
(1,909
)
(41
)
Other, net
(173
)
625
(Increase) decrease in operating assets: Accounts receivable
(37,386
)
(7,040
)
Inventories
(22,917
)
(724
)
Income taxes receivable
(808
)
327
Other current assets
(2,247
)
(1,736
)
Other assets
2,921
1,855
Increase (decrease) in operating liabilities: Accounts payable
15,530
(18
)
Accrued expenses and other liabilities
6,058
(1,424
)
Income taxes payable
5,284
4,885
Other noncurrent liabilities
(3,925
)
(1,390
)
Net cash provided by operating activities
49,533
40,331
Cash flows from investing activities: Acquisition of a
business, net of cash acquired
(1,000
)
-
Amounts paid for net assets acquired
(2,400
)
-
Capital expenditures
(10,305
)
(5,215
)
Proceeds from dispositions of equipment
62
67
Cash settlement of forward contracts
947
(357
)
Software development costs
(1,490
)
-
Net cash used in investing activities
(14,186
)
(5,505
)
Cash flows from financing activities: Borrowings on
revolving credit facilities
9,602
11,000
Repayment of borrowings on revolving credit facilities
(23,500
)
(26,359
)
Borrowings on long-term non-revolving debt
-
5,714
Repayment of borrowings on long-term non-revolving debt
(8,163
)
(4,001
)
Proceeds from stock issued
814
723
Dividends to shareholders
(5,791
)
(5,772
)
Other financing activities
(1,686
)
(960
)
Net cash used in financing activities
(28,724
)
(19,655
)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
2,532
(331
)
Net increase in cash, cash equivalents and restricted cash
9,155
14,840
Cash, cash equivalents and restricted cash, beginning of period
25,257
22,162
Cash, cash equivalents and restricted cash, end of period
$
34,412
$
37,002
HELIOS TECHNOLOGIES
SEGMENT DATA
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
July 3, 2021
June 27, 2020
July 3, 2021
June 27, 2020
Sales: Hydraulics
$
133,039
$
102,089
$
252,145
$
205,907
Electronics
90,374
17,205
176,113
42,870
Consolidated
$
223,413
$
119,294
$
428,258
$
248,777
Gross profit and margin: Hydraulics
$
50,915
$
37,473
$
96,325
$
77,147
38.3
%
36.7
%
38.2
%
37.5
%
Electronics
31,237
7,246
61,195
19,422
34.5
%
42.1
%
34.8
%
45.3
%
Consolidated
$
82,152
$
44,719
$
157,520
$
96,569
36.8
%
37.5
%
36.8
%
38.8
%
Operating income (loss) and margin: Hydraulics
$
32,328
$
21,989
$
60,401
$
43,471
24.3
%
21.5
%
24.0
%
21.1
%
Electronics
19,599
939
37,879
5,717
21.7
%
5.5
%
21.5
%
13.3
%
Corporate and other
(9,865
)
(6,226
)
(21,609
)
(42,519
)
Consolidated
$
42,062
$
16,702
$
76,671
$
6,669
18.8
%
14.0
%
17.9
%
2.7
%
ORGANIC AND ACQUIRED
REVENUE
(In thousands)
(Unaudited)
Three Months Ended Full Year Ended Three
Months Ended Six Months Ended March 28, June
27, September 26, January 2, January 2,
April 3, July 3, July 3,
2020
2020
2020
2021
2021
2021
2021
2021
Hydraulics Organic
$
103,818
$
102,089
$
98,206
$
103,079
$
407,192
$
119,106
$
133,039
$
252,145
Acquisition
-
-
-
-
-
-
-
-
Total
$
103,818
$
102,089
$
98,206
$
103,079
$
407,192
$
119,106
$
133,039
$
252,145
Electronics Organic
$
25,665
$
17,205
$
24,439
$
22,481
$
89,790
$
29,459
$
30,191
$
59,651
Acquisition
-
-
-
26,058
26,058
56,279
60,183
116,462
Total
$
25,665
$
17,205
$
24,439
$
48,539
$
115,848
$
85,738
$
90,374
$
176,113
Consolidated Organic
$
129,483
$
119,294
$
122,645
$
125,560
$
496,982
$
148,565
$
163,230
$
311,796
Acquisition
-
-
-
26,058
26,058
56,279
60,183
116,462
Total
$
129,483
$
119,294
$
122,645
$
151,618
$
523,040
$
204,844
$
223,413
$
428,258
HELIOS TECHNOLOGIES
ADDITIONAL INFORMATION
(Unaudited)
2021 Sales by Geographic Region and Segment ($ in
millions)
Q1 % Changey/y Q2 % Changey/y
YTD 2021 % Changey/y Americas: Hydraulics
$
34.3
(8
%)
$
41.7
22
%
$
76.0
6
%
Electronics
65.0
201
%
64.1
378
%
129.1
269
%
Consol. Americas
99.3
69
%
105.8
122
%
205.1
93
%
% of total
48
%
47
%
48
%
EMEA: Hydraulics
$
43.3
29
%
$
46.6
49
%
$
89.9
39
%
Electronics
9.3
272
%
11.0
479
%
20.4
364
%
Consol. EMEA
52.6
46
%
57.6
74
%
110.3
60
%
% of total
26
%
26
%
26
%
APAC: Hydraulics
$
41.5
26
%
$
44.7
22
%
$
86.2
24
%
Electronics
11.4
613
%
15.3
705
%
26.6
659
%
Consol. APAC
52.9
53
%
60.0
55
%
112.9
54
%
% of total
26
%
27
%
26
%
Total
$
204.8
58
%
$
223.4
87
%
$
428.3
72
%
2020 Sales by Geographic Region and Segment ($ in millions)
Q1 % Changey/y Q2 % Changey/y Q3
% Changey/y Q4 % Changey/y YTD 2020
% Changey/y Americas: Hydraulics
$
37.3
(10
%)
$
34.2
(17
%)
$
27.7
(36
%)
$
31.3
(14
%)
$
130.5
(20
%)
Electronics
21.6
(17
%)
13.4
(50
%)
21.4
(11
%)
37.5
92
%
93.9
(2
%)
Consol. Americas
58.9
(13
%)
47.6
(30
%)
49.1
(27
%)
68.8
24
%
224.4
(13
%)
% of total
45
%
40
%
40
%
45
%
43
%
EMEA: Hydraulics
$
33.5
(20
%)
$
31.2
(15
%)
$
32.1
1
%
$
34.4
11
%
$
131.2
(7
%)
Electronics
2.5
0
%
1.9
6
%
1.5
(29
%)
4.9
145
%
10.8
29
%
Consol. EMEA
36.0
(19
%)
33.1
(14
%)
33.6
(1
%)
39.3
19
%
142.0
(5
%)
% of total
28
%
28
%
27
%
26
%
27
%
APAC: Hydraulics
$
33.0
(0
%)
$
36.7
3
%
$
38.4
10
%
$
37.4
6
%
$
145.5
5
%
Electronics
1.6
(11
%)
1.9
12
%
1.5
(17
%)
6.1
221
%
11.1
54
%
Consol. APAC
34.6
(1
%)
38.6
3
%
39.9
9
%
43.5
17
%
156.6
7
%
% of total
27
%
32
%
33
%
29
%
30
%
Total
$
129.5
(12
%)
$
119.3
(17
%)
$
122.6
(11
%)
$
151.6
20
%
$
523.0
(6
%)
HELIOS TECHNOLOGIES
Non-GAAP Adjusted Operating
Income RECONCILIATION
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended July
3,2021 June 27,2020 July 3,2021 June
27,2020 GAAP operating income
$
42,062
$
16,702
$
76,671
$
6,669
Acquisition-related amortization of intangible assets
7,680
4,417
17,878
8,765
Acquisition and financing-related expenses
1,325
-
2,247
74
Restructuring charges
-
298
418
298
CEO and officer transition costs
569
1,644
569
1,809
Goodwill impairment
-
-
-
31,871
Acquisition integration costs
289
-
884
-
Non-GAAP adjusted operating income
$
51,925
$
23,061
$
98,667
$
49,486
GAAP operating margin
18.8
%
14.0
%
17.9
%
2.7
%
Non-GAAP adjusted operating margin
23.2
%
19.3
%
23.0
%
19.9
%
Adjusted EBITDA
RECONCILIATION
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended Twelve
MonthsEnded July 3,2021 June 27,2020 July
3,2021 June 27,2020 July 3,2021 Net
income (loss)
$
30,694
$
12,908
$
53,282
$
(4,315
)
$
71,814
Interest expense, net
4,400
2,891
9,151
5,842
16,595
Income tax provision
6,575
636
13,382
4,844
18,367
Depreciation and amortization
12,905
8,645
28,142
17,021
50,816
EBITDA
54,574
25,080
103,957
23,392
157,592
Acquisition and financing-related expenses
1,325
-
2,247
74
9,436
Restructuring charges
-
298
418
298
482
CEO and officer transition costs
569
1,644
569
1,809
1,352
Goodwill impairment
-
-
-
31,871
-
Inventory step-up amortization
-
-
-
-
1,874
Acquisition integration costs
289
-
884
-
1,140
Other
698
(34
)
698
(34
)
685
Adjusted EBITDA
$
57,455
$
26,988
$
108,773
$
57,410
$
172,561
Adjusted EBITDA margin
25.7
%
22.6
%
25.4
%
23.1
%
24.6
%
Balboa Water Group pre-acquisition adjusted EBITDA
14,141
TTM Pro forma adjusted EBITDA
$
186,702
HELIOS TECHNOLOGIES
Non-GAAP Cash Net Income
RECONCILIATION
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended July
3,2021 June 27,2020 July 3,2021 June
27,2020 Net income (loss)
$
30,694
$
12,908
$
53,282
$
(4,315
)
Amortization of intangible assets
7,713
4,417
17,944
8,765
Acquisition and financing-related expenses
1,325
-
2,247
74
Restructuring charges
-
298
418
298
CEO and officer transition costs
569
1,644
569
1,809
Goodwill impairment
-
-
-
31,871
Acquisition integration costs
289
-
884
-
Other
698
(34
)
698
(34
)
Tax effect of above
(2,649
)
(1,581
)
(5,690
)
(2,728
)
Non-GAAP cash net income
$
38,639
$
17,652
$
70,352
$
35,740
Non-GAAP cash net income per diluted share
$
1.20
$
0.55
$
2.18
$
1.11
Net Debt-to-Adjusted EBITDA
RECONCILIATION
(In thousands)
(Unaudited)
As of
July 3, 2021
Current portion of long-term non-revolving debt, net
$
15,662
Revolving lines of credit
239,198
Long-term non-revolving debt, net
182,272
Total debt
437,132
Less: Cash and cash equivalents
34,371
Net debt
$
402,761
TTM Pro forma adjusted EBITDA*
$
186,702
Ratio of net debt to TTM pro forma adjusted EBITDA
2.16
*On a pro-forma basis for Balboa Water Group
Non-GAAP Financial Measures and Non-GAAP Forward-looking
Financial Measures:
Adjusted operating income, adjusted operating margin, EBITDA,
adjusted EBITDA, adjusted EBITDA margin, net debt-to-adjusted
EBITDA, cash net income and cash net income per diluted share are
not measures determined in accordance with generally accepted
accounting principles in the United States, commonly known as GAAP.
Nevertheless, Helios believes that providing non-GAAP information
such as adjusted operating income, adjusted operating margin,
EBITDA, adjusted EBITDA, adjusted EBITDA margin, net
debt-to-adjusted EBITDA, cash net income and cash net income per
diluted share are important for investors and other readers of
Helios’s financial statements, as they are used as analytical
indicators by Helios’s management to better understand operating
performance. Because adjusted operating income, adjusted operating
margin, adjusted EBITDA, adjusted EBITDA margin, net
debt-to-adjusted EBITDA, cash net income and cash net income per
diluted share are non-GAAP measures and are thus susceptible to
varying calculations, adjusted operating income, adjusted operating
margin, EBITDA, adjusted EBITDA, adjusted EBITDA margin, net
debt-to-adjusted EBITDA, cash net income and cash net income per
diluted share, as presented, may not be directly comparable with
other similarly titled measures used by other companies.
The Company does not provide a reconciliation of forward-looking
non-GAAP financial measures, such as adjusted EBITDA, adjusted
EBITDA margin and cash net income and cash net income per diluted
share disclosed above in our 2021 Outlook, to their comparable GAAP
financial measures because it could not do so without unreasonable
effort due to the unavailability of the information needed to
calculate reconciling items and due to the variability, complexity
and limited visibility of the adjusting items that would be
excluded from the non-GAAP financial measures in future periods.
When planning, forecasting and analyzing future periods, the
Company does so primarily on a non-GAAP basis without preparing a
GAAP analysis.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210809005569/en/
Tania Almond Vice President, Investor Relations & Corporate
Communications (941) 362-1333 tania.almond@HLIO.com
Deborah Pawlowski Kei Advisors LLC (716) 843-3908
dpawlowski@keiadvisors.com
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