UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number
(Exact Name of Registration as Specified in its Charter)
|
||
(State or Other Jurisdiction of Incorporation or Organization) |
|
(I.R.S. Employer Identification No.) |
|
|
|
|
||
(Address of Principal Executive Offices) |
|
(Zip Code) |
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
☒ |
|
Accelerated filer |
|
☐ |
|
Non-accelerated filer |
|
☐ |
|
Smaller Reporting Company |
|
|
|
|
|
|
Emerging growth company |
|
|
|
|
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The registrant had
Helios Technologies, Inc.
INDEX
For the quarter ended
April 1, 2023
|
|
|
Page |
|
|
|
|
||
|
3 |
|||
|
|
|
|
|
|
Item 1. |
|
3 |
|
|
|
|
|
|
|
Consolidated Balance Sheets as of April 1, 2023 (unaudited) and December 31, 2022 |
|
3 |
|
|
|
|
|
|
|
|
4 |
||
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income for the Three Months Ended April 1, 2023 (unaudited) and April 2, 2022 (unaudited) |
|
5 |
|
|
|
|
|
|
|
|
6 |
||
|
|
|
|
|
|
Consolidated Statements of Cash Flows for the Three Months Ended April 1, 2023 (unaudited) and April 2, 2022 (unaudited) |
|
7 |
|
|
|
|
|
|
|
Condensed Notes to the Consolidated, Unaudited Financial Statements |
|
8 |
|
|
|
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
21 |
|
|
|
|
|
|
Item 3. |
|
29 |
|
|
|
|
|
|
|
Item 4. |
|
29 |
|
|
|
|
|
|
|
30 |
|||
|
|
|
|
|
|
Item 1. |
|
30 |
|
|
|
|
|
|
|
Item 1A. |
|
30 |
|
|
|
|
|
|
|
Item 2. |
|
30 |
|
|
|
|
|
|
|
Item 3. |
|
30 |
|
|
|
|
|
|
|
Item 4. |
|
30 |
|
|
|
|
|
|
|
Item 5. |
|
30 |
|
|
|
|
|
|
|
Item 6. |
|
31 |
2
PART I: FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS.
Helios Technologies, Inc.
Consolidated Balance Sheets
(in millions, except per share data)
|
|
April 1, 2023 |
|
|
December 31, 2022 |
|
||
|
|
(unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable, net of allowance for credit losses of $ |
|
|
|
|
|
|
||
Inventories, net |
|
|
|
|
|
|
||
Income taxes receivable |
|
|
|
|
|
|
||
Other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Other intangible assets, net |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities and shareholders' equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued compensation and benefits |
|
|
|
|
|
|
||
Other accrued expenses and current liabilities |
|
|
|
|
|
|
||
Current portion of long-term non-revolving debt, net |
|
|
|
|
|
|
||
Dividends payable |
|
|
|
|
|
|
||
Income taxes payable |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Revolving line of credit |
|
|
|
|
|
|
||
Long-term non-revolving debt, net |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
|
|
|
|
||
Other noncurrent liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
Shareholders' equity: |
|
|
|
|
|
|
||
Preferred stock, par value $ |
|
|
|
|
|
|
||
Common stock, par value $ |
|
|
|
|
|
|
||
Capital in excess of par value |
|
|
|
|
|
|
||
Retained earnings |
|
|
|
|
|
|
||
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total shareholders' equity |
|
|
|
|
|
|
||
Total liabilities and shareholders' equity |
|
$ |
|
|
$ |
|
The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.
3
Helios Technologies, Inc.
Consolidated Statements of Operations
(in millions, except per share data)
|
|
Three Months Ended |
|
|||||
|
|
April 1, 2023 |
|
|
April 2, 2022 |
|
||
|
|
(unaudited) |
|
|
(unaudited) |
|
||
Net sales |
|
$ |
|
|
$ |
|
||
Cost of sales |
|
|
|
|
|
|
||
Gross profit |
|
|
|
|
|
|
||
Selling, engineering and administrative expenses |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Operating income |
|
|
|
|
|
|
||
Interest expense, net |
|
|
|
|
|
|
||
Foreign currency transaction loss (gain), net |
|
|
|
|
|
( |
) |
|
Other non-operating expense, net |
|
|
|
|
|
|
||
Income before income taxes |
|
|
|
|
|
|
||
Income tax provision |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Net income per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
|
|
$ |
|
||
Diluted |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Weighted average shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
|
|
|
|
||
Diluted |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Dividends declared per share |
|
$ |
|
|
$ |
|
The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.
4
Helios Technologies, Inc.
Consolidated Statements of Comprehensive Income
(in millions)
|
|
Three Months Ended |
|
|||||
|
|
April 1, 2023 |
|
|
April 2, 2022 |
|
||
|
|
(unaudited) |
|
|
(unaudited) |
|
||
Net income |
|
$ |
|
|
$ |
|
||
Other comprehensive income (loss) |
|
|
|
|
|
|
||
Foreign currency translation adjustments, net of tax |
|
|
|
|
|
( |
) |
|
Unrealized (loss) gain on interest rate swaps, net of tax |
|
|
( |
) |
|
|
|
|
Total other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
Comprehensive income |
|
$ |
|
|
$ |
|
The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.
5
Helios Technologies, Inc.
Consolidated Statements of Shareholders’ Equity (unaudited)
Three Months Ended
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital in |
|
|
|
|
|
other |
|
|
|
|
||||||||
|
|
Preferred |
|
|
Preferred |
|
|
Common |
|
|
Common |
|
|
excess of |
|
|
Retained |
|
|
comprehensive |
|
|
|
|
||||||||
|
|
shares |
|
|
stock |
|
|
shares |
|
|
stock |
|
|
par value |
|
|
earnings |
|
|
loss |
|
|
Total |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Shares issued, ESPP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cancellation of shares for payment of employee tax withholding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||||
Dividends declared |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at April 1, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at January 1, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||||
Shares issued, restricted stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Shares issued, ESPP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cancellation of shares for payment of employee tax withholding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||||
Dividends declared |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||||
Balance at April 2, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.
6
Helios Technologies, Inc.
Consolidated Statements of Cash Flows
(in millions)
|
|
Three Months Ended |
|
|||||
|
|
April 1, 2023 |
|
|
April 2, 2022 |
|
||
|
|
(unaudited) |
|
|
(unaudited) |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Benefit for deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Forward contract losses (gains), net |
|
|
|
|
|
( |
) |
|
Other, net |
|
|
|
|
|
|
||
(Increase) decrease in, net of acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Income taxes receivable |
|
|
|
|
|
|
||
Other current assets |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
|
|
|
|
||
Increase (decrease) in, net of acquisitions: |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses and other liabilities |
|
|
( |
) |
|
|
( |
) |
Income taxes payable |
|
|
|
|
|
|
||
Other noncurrent liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Business acquisitions, net of cash acquired |
|
|
( |
) |
|
|
|
|
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from dispositions of property, plant and equipment |
|
|
|
|
|
|
||
Cash settlement of forward contracts |
|
|
|
|
|
|
||
Software development costs |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Borrowings on revolving credit facilities |
|
|
|
|
|
|
||
Repayment of borrowings on revolving credit facilities |
|
|
( |
) |
|
|
( |
) |
Repayment of borrowings on long-term non-revolving debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from stock issued |
|
|
|
|
|
|
||
Dividends to shareholders |
|
|
( |
) |
|
|
( |
) |
Payment of employee tax withholding on equity award vestings |
|
|
( |
) |
|
|
( |
) |
Other financing activities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
|
||
Net (decrease) increase in cash and cash equivalents |
|
|
( |
) |
|
|
|
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.
7
HELIOS TECHNOLOGIES, INC.
CONDENSED NOTES TO THE CONSOLIDATED, UNAUDITED FINANCIAL STATEMENTS
(Currencies in millions, except per share data)
1. COMPANY BACKGROUND
Helios Technologies, Inc. (“Helios,” or the “Company”) together with its wholly owned subsidiaries, 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 and health and wellness. Helios sells its products to customers in over
The Company operates in
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements are not included herein. The financial statements are prepared on a consistent basis (including normal recurring adjustments) and should be read in conjunction with the consolidated financial statements and related notes contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“Form 10-K”), filed by Helios with the Securities and Exchange Commission on February 28, 2023. In management’s opinion, all adjustments necessary for a fair presentation of the Company’s financial statements are reflected in the interim periods presented. Operating results for the three months ended April 1, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ended December 30, 2023.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
8
Earnings Per Share
The following table presents the computation of basic and diluted earnings per common share (in millions, except per share data):
|
|
Three Months Ended |
|
|||||
|
|
April 1, 2023 |
|