10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 28, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-40935

HELIOS TECHNOLOGIES, INC.

(Exact Name of Registration as Specified in its Charter)


Florida		59-2754337
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

7456 16th St E SARASOTA, Florida		34243
(Address of Principal Executive Offices)		(Zip Code)

(941)362-1200

(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

    Common Stock $.001 Par Value

    HLIO

    The New York Stock Exchange

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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.


Large accelerated filer	☒	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 ☐ No ☒

The registrant had 33,242,374 shares of common stock, par value $.001, outstanding as of October 25, 2024.

Helios Technologies, Inc.

INDEX

For the quarter ended

September 28, 2024


			Page

PART I. FINANCIAL INFORMATION			3

	Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of September 28, 2024 (unaudited) and December 30, 2023		3

	Consolidated Statements of Operations (unaudited) for the Three Months Ended September 28, 2024 and September 30, 2023		4

	Consolidated Statements of Operations (unaudited) for the Nine Months Ended September 28, 2024 and September 30, 2023		5

	Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended September 28, 2024 and September 30, 2023		6

	Consolidated Statements of Shareholders’ Equity (unaudited) for the Three Months Ended September 28, 2024 and September 30, 2023		7

	Consolidated Statements of Shareholders’ Equity (unaudited) for the Nine Months Ended September 28, 2024 and September 30, 2023		8

	Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 28, 2024 and September 30, 2023		9

	Condensed Notes to the Consolidated, Unaudited Financial Statements		10

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

	Item 4.	Controls and Procedures	36

PART II. OTHER INFORMATION			37

	Item 1.	Legal Proceedings	37

	Item 1A.	Risk Factors	37

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37

	Item 3.	Defaults Upon Senior Securities	37

	Item 4.	Mine Safety Disclosures	37

	Item 5.	Other Information	37

	Item 6.	Exhibits	38

PART I: FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

Helios Technologies, Inc.

Consolidated Balance Sheets

(in millions, except per share data)


	September 28, 2024			December 30, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	46.7		$	32.4
Accounts receivable, net of allowance for credit losses of $2.5 and $2.1		120.8			114.8
Inventories, net		199.2			215.1
Income taxes receivable		10.9			11.3
Other current assets		28.3			23.1
Total current assets		405.9			396.7
Property, plant and equipment, net		223.7			227.9
Deferred income taxes		1.8			1.7
Goodwill		517.0			514.0
Other intangible assets, net		404.5			426.4
Other assets		18.8			23.7
Total assets	$	1,571.7		$	1,590.4
Liabilities and shareholders' equity
Current liabilities:
Accounts payable	$	56.9		$	70.3
Accrued compensation and benefits		23.4			19.4
Other accrued expenses and current liabilities		28.5			27.0
Current portion of long-term non-revolving debt, net		17.6			23.2
Dividends payable		3.0			3.0
Income taxes payable		4.6			2.0
Total current liabilities		134.0			144.9
Revolving lines of credit		174.5			199.8
Long-term non-revolving debt, net		287.9			298.3
Deferred income taxes		56.7			57.1
Other noncurrent liabilities		33.1			35.7
Total liabilities		686.2			735.8
Commitments and contingencies
Shareholders' equity:
Preferred stock, par value $0.001, 2.0 shares authorized, no shares issued or outstanding		—			—
Common stock, par value $0.001, 100.0 shares authorized, 33.2 and 33.1 shares issued and outstanding		—			—
Capital in excess of par value		436.0			434.4
Retained earnings		500.8			475.6
Accumulated other comprehensive loss		(51.3	)		(55.4	)
Total shareholders' equity		885.5			854.6
Total liabilities and shareholders' equity	$	1,571.7		$	1,590.4

The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.

Helios Technologies, Inc.

Consolidated Statements of Operations (unaudited)

(in millions, except per share data)


	Three Months Ended
	September 28, 2024			September 30, 2023
	(unaudited)			(unaudited)
Net sales	$	194.5		$	201.4
Cost of sales		134.0			141.7
Gross profit		60.5			59.7
Selling, engineering and administrative expenses		30.4			37.7
Amortization of intangible assets		7.9			8.2
Operating income		22.2			13.8
Interest expense, net		9.0			8.7
Foreign currency transaction loss, net		0.1			0.1
Other non-operating income, net		(0.2	)		-
Income before income taxes		13.3			5.0
Income tax provision		1.9			1.5
Net income	$	11.4		$	3.5

Net income per share:
Basic	$	0.34		$	0.11
Diluted	$	0.34		$	0.11

Weighted average shares outstanding:
Basic		33.2			33.0
Diluted		33.2			33.1

Dividends declared per share	$	0.09		$	0.09

The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.

Helios Technologies, Inc.

Consolidated Statements of Operations (unaudited)

(in millions, except per share data)


	Nine Months Ended
	September 28, 2024			September 30, 2023
	(unaudited)			(unaudited)
Net sales	$	626.4		$	642.2
Cost of sales		428.1			435.7
Gross profit		198.3			206.5
Selling, engineering and administrative expenses		106.2			113.8
Amortization of intangible assets		23.6			24.7
Operating income		68.5			68.0
Interest expense, net		25.7			22.6
Foreign currency transaction loss, net		0.5			0.6
Other non-operating income, net		(0.6	)		-
Income before income taxes		42.9			44.8
Income tax provision		8.7			10.7
Net income	$	34.2		$	34.1

Net income per share:
Basic	$	1.03		$	1.04
Diluted	$	1.03		$	1.04

Weighted average shares outstanding:
Basic		33.2			32.8
Diluted		33.2			33.0

Dividends declared per share	$	0.27		$	0.27

The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.

Helios Technologies, Inc.

Consolidated Statements of Comprehensive (Loss) Income (unaudited)

(in millions)


	Three Months Ended					Nine Months Ended
	September 28, 2024		September 30, 2023			September 28, 2024		September 30, 2023
Net income	$	11.4	$	3.5		$	34.2	$	34.1
Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax		14.3		(10.2	)		3.7		(6.5	)
Unrealized gain (loss) on interest rate swaps, net of tax		—		0.9			0.4		1.0
Total other comprehensive (loss) income		14.3		(9.3	)		4.1		(5.5	)
Comprehensive income	$	25.7	$	(5.8	)	$	38.3	$	28.6

The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.

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 June 29, 2024		—	$	—		33.2	$	—	$	439.7		$	492.4		$	(65.6	)	$	866.5
Shares issued, restricted stock										0.1									0.1
Shares issued, ESPP										0.5									0.5
Stock-based compensation										(4.2	)								(4.2	)
Cancellation of shares for payment of employee tax withholding										(0.1	)								(0.1	)
Dividends declared													(3.0	)					(3.0	)
Net income													11.4						11.4
Other comprehensive income																14.3			14.3
Balance at September 28, 2024		—	$	—		33.2	$	—	$	436.0		$	500.8		$	(51.3	)	$	885.5

Balance at July 1, 2023		—	$	—		33.0	$	—	$	428.4		$	474.7		$	(55.6	)	$	847.5
Shares issued, ESPP										0.6									0.6
Stock-based compensation										2.7									2.7
Cancellation of shares for payment of employee tax withholding										(0.1	)								(0.1	)
Dividends declared													(2.9	)					(2.9	)
Net income													3.5						3.5
Other comprehensive loss																(9.3	)		(9.3	)
Balance at September 30, 2023		—	$	—		33.0	$	—	$	431.6		$	475.3		$	(64.9	)	$	842.0

The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.

Helios Technologies, Inc.

Consolidated Statements of Shareholders’ Equity (unaudited)

Nine 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 30, 2023		—	$	—		33.1	$	—	$	434.4		$	475.6		$	(55.4	)	$	854.6
Shares issued, restricted stock						0.1				0.1									0.1
Shares issued, ESPP										1.5									1.5
Stock-based compensation										2.5									2.5
Cancellation of shares for payment of employee tax withholding										(2.5	)								(2.5	)
Dividends declared													(9.0	)					(9.0	)
Net income													34.2						34.2
Other comprehensive income																4.1			4.1
Balance at September 28, 2024		—	$	—		33.2	$	—	$	436.0		$	500.8		$	(51.3	)	$	885.5

Balance at December 31, 2022		—	$	—		32.6	$	—	$	404.3		$	450.0		$	(59.4	)	$	794.9
Shares issued, ESPP										1.6									1.6
Shares issued, acquisition						0.4				18.7									18.7
Stock-based compensation										9.2									9.2
Cancellation of shares for payment of employee tax withholding										(2.2	)								(2.2	)
Dividends declared													(8.8	)					(8.8	)
Net income													34.1						34.1
Other comprehensive loss																(5.5	)		(5.5	)
Balance at September 30, 2023		—	$	—		33.0	$	—	$	431.6		$	475.3		$	(64.9	)	$	842.0

The accompanying Condensed Notes to the Consolidated, Unaudited Financial Statements are an integral part of these financial statements.

Helios Technologies, Inc.

Consolidated Statements of Cash Flows (unaudited)

Nine Months Ended

(in millions)


	Nine Months Ended
	September 28, 2024			September 30, 2023
	(unaudited)			(unaudited)
Cash flows from operating activities:
Net income	$	34.2		$	34.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		47.8			47.7
Stock-based compensation expense		2.5			9.2
Amortization of debt issuance costs		0.9			0.5
Benefit for deferred income taxes		(2.1	)		(3.1	)
Forward contract losses, net		—			0.1
Other, net		1.1			0.5
(Increase) decrease in, net of acquisitions:
Accounts receivable		(5.5	)		(1.5	)
Inventories		16.2			(14.4	)
Income taxes receivable		0.7			0.3
Other current assets		(5.0	)		(7.5	)
Other assets		4.8			5.8
Increase (decrease) in, net of acquisitions:
Accounts payable		(13.4	)		(9.1	)
Accrued expenses and other liabilities		5.3			(6.9	)
Income taxes payable		2.3			1.8
Other noncurrent liabilities