Exhibit 99.1

img252001787_0.jpg 

NEWS

RELEASE

 

FOR IMMEDIATE RELEASE

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34%
on a 17% Increase in Revenue Driven by Strong Execution

•
Providing best in class lead times through execution of manufacturing and operations strategy along with focused inventory investments resulted in strong revenue growth of 17% in the quarter and 14% organic growth; achieved $241 million in revenue
•
Operational efficiencies and strong operating leverage enabled net income of $30.5 million, up 35% over the prior-year period
•
Innovation empowered new customer wins, market share gains and stronger brand value
•
Achieved diluted EPS of $0.94 in the quarter; Diluted Non-GAAP Cash EPS of $1.18 up 19%
•
Strong financial flexibility with net debt to adjusted EBITDA leverage ratio to 1.79x[1]
•
2022 outlook reaffirmed including revenue between $930 million to $950 million, approximately 8% growth at the midpoint of range based on macroenvironment; on path to achieve strategic goal of at least $1 billion in revenue by 2023

SARASOTA, FL, May 9, 2022 — Helios Technologies, Inc. (NYSE: 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 first quarter ended April 2, 2022. Results include the assets of BJN Technologies, LLC (“BJN”) on January 21, 2021, NEM S.r.l. (“NEM”) on July 9, 2021 and Shenzhen Joyonway Electronics & Technology Co., Ltd (“Joyonway”) on October 11, 2021.

Josef Matosevic, the Company’s President and Chief Executive Officer, commented, “We delivered another quarter of outperformance as the Helios team continues to execute well in challenging conditions. We are providing our customers with industry leading delivery schedules, innovating to create higher value hence stickier solutions to garner customer loyalty, and our sales and engineering teams are highly engaged with customers to enable their success. Of note, our 34% earnings growth validates the significant operating leverage inherent in the business. With our solid cash generation and strong balance sheet, we have the financial strength to execute our augmented strategy to deliver accelerated growth both organically and through acquisitions while also being very well positioned to weather challenges presented from the global macroenvironment.

On a run rate basis, we are well on our way of meeting our goal to reach at least $1 billion in revenue by 2023. We reaffirm our guidance for the full year both top and bottom line, despite the continued macroeconomic headwinds and tougher visibility in the second half of the year.”

He concluded, “Our recent announcement about another flywheel acquisition of Taimi R&D, Inc. is a clear demonstration of the continued success we are having finding high-quality bolt-on businesses that enhance our already leading technical expertise and fill in portfolio areas with proprietary scalable technology solutions.”
 

[1]On a pro-forma basis for NEM and Joyonway

 

Helios Technologies | 7456 16th St East | Sarasota, FL 34243 | 941-362-1200

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 2

First Quarter 2022 Consolidated Results

($ in millions, except per share data)

Q1 2022

 

 

Q1 2021

 

 

Change

 

 

% Change

 

Net sales

$

240.5

 

 

$

204.8

 

 

$

35.7

 

 

 

17

%

Gross profit

$

83.6

 

 

$

75.4

 

 

$

8.2

 

 

 

11

%

Gross margin

 

34.8

%

 

 

36.8

%

 

 

(200

)

bps

 

 

Operating income

$

42.9

 

 

$

34.6

 

 

$

8.3

 

 

 

24

%

Operating margin

 

17.8

%

 

 

16.9

%

 

 

90

 

bps

 

 

Non-GAAP adjusted operating margin

 

21.8

%

 

 

22.8

%

 

 

(100

)

bps

 

 

Net income

$

30.5

 

 

$

22.6

 

 

$

7.9

 

 

 

35

%

Diluted EPS

$

0.94

 

 

$

0.70

 

 

$

0.24

 

 

 

34

%

Non-GAAP cash net income

$

38.3

 

 

$

31.7

 

 

$

6.6

 

 

 

21

%

Diluted Non-GAAP cash EPS

$

1.18

 

 

$

0.99

 

 

$

0.19

 

 

 

19

%

Adjusted EBITDA

$

59.0

 

 

$

51.3

 

 

$

7.7

 

 

 

15

%

Adjusted EBITDA margin

 

24.5

%

 

 

25.1

%

 

 

(60

)

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 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 most of our markets with our mobile equipment and health and wellness end markets leading the growth. Responsive manufacturing processes was an enabler of growth allowing us to deliver products and solutions to customers in a timely manner amidst supply chain constraints. Sales included $7.2 million in revenue from acquisitions. Organic growth in the quarter was 14%. (See the table in this release that provides acquired revenue by segment by quarter).
•
Strength in demand across the Americas and EMEA, with moderate growth in APAC.
•
Foreign currency translation adjustment on sales: $4.7 million unfavorable.

Profits and margins

•
Gross profit and margin drivers: gross profit benefitted from increased volume during the quarter while gross margin declined by 200 basis points compared with the prior-year period, due to increases in logistics, raw material and labor costs.
•
Selling, engineering and administrative expenses: as a percentage of sales, decreased 90 basis points to 14.0% compared with the 2021 first quarter, reflecting both the benefit of fixed cost leverage on higher sales partially offset by higher operating expenses.
•
Amortization of intangible assets: $7.0 million down from $10.2 million in the prior year reflecting timing related to the Company’s acquisitions.

Non-operating items

•
Net interest expense: $3.8 million in the quarter, down $1.0 million compared with the prior-year period due to lower debt balances.
•
Effective tax rate: 22.4% compared with 23.2% in the prior-year period reflecting levels of income in varying tax jurisdictions.

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 3

Net income, earnings per share, non-GAAP cash earnings per share and adjusted EBITDA

•
GAAP net income and diluted earnings per share: $30.5 million and $0.94 per share, up 34%.
•
Diluted Non-GAAP cash earnings per share: $1.18 compared with $0.99 last year, up 19% due to higher sales, operational efficiencies, and strong operating leverage.
•
Adjusted EBITDA margin: 60 basis point impact to 24.5% compared with the prior-year period as higher volume was offset by increases in logistics expenses related to supply chain challenges, material inflation and labor costs.

Hydraulics Segment Review

(Refer to sales by geographic region and segment data in accompanying tables)

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

Three Months Ended

 

 

 

 

 

 

 

 

 

Q1 2022

 

 

Q1 2021

 

 

Change

 

 

% Change

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

43.1

 

 

$

34.3

 

 

$

8.8

 

 

 

26

%

 

EMEA

 

52.9

 

 

 

43.3

 

 

 

9.6

 

 

 

22

%

 

APAC

 

41.1

 

 

 

41.5

 

 

 

(0.4

)

 

 

(1

%)

 

Total Segment Sales

$

137.1

 

 

$

119.1

 

 

$

18.0

 

 

 

15

%

 

Gross Profit

$

50.8

 

 

$

45.4

 

 

$

5.4

 

 

 

12

%

 

Gross Margin

 

37.1

%

 

 

38.1

%

 

 

(100

)

bps

 

 

 

SEA Expenses

$

19.2

 

 

$

17.3

 

 

$

1.9

 

 

 

11

%

 

Operating Income

$

31.6

 

 

$

28.1

 

 

$

3.5

 

 

 

13

%

 

Operating Margin

 

23.1

%

 

 

23.6

%

 

 

(50

)

bps

 

 

 

First Quarter Hydraulics Segment Review

•
Higher sales were driven by improved demand in the Americas and EMEA regions, as well as many of our end markets driven by the mobile and industrial equipment markets; foreign currency exchange rates had a $4.5 million unfavorable adjustment on sales.
•
Gross profit and margin drivers: gross profit increased $5.4 million, or 12%, compared with the same quarter of the prior year primarily due to higher sales volume partially offset by unfavorable foreign exchange. Gross margin reflects price increases and fixed cost leverage on the higher sales that were more than offset by increases in raw material, logistics and labor costs and the unfavorable impacts from exchange rates.
•
Operating income increased $3.5 million, or 13%, while operating margin of 23.1% reflects flow through of gross margin offset by fixed cost leverage on higher sales and disciplined cost management.

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 4

Electronics Segment Review

(Refer to sales by geographic region and segment data in accompanying tables)

($ in millions)

 

 

 

 

 

 

 

 

 

 

Electronics

Three Months Ended

 

 

 

 

 

 

 

 

Q1 2022

 

 

Q1 2021

 

 

Change

 

 

% Change

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

Americas

$

77.7

 

 

$

65.0

 

 

$

12.7

 

 

 

20

%

EMEA

 

11.8

 

 

 

9.3

 

 

 

2.5

 

 

 

27

%

APAC

 

13.9

 

 

 

11.4

 

 

 

2.5

 

 

 

22

%

Total Segment Sales

$

103.4

 

 

$

85.7

 

 

$

17.7

 

 

 

21

%

Gross Profit

$

32.8

 

 

$

30.0

 

 

$

2.8

 

 

 

9

%

Gross Margin

 

31.7

%

 

 

35.0

%

 

 

(330

)

bps

 

 

SEA Expenses

$

12.3

 

 

$

11.7

 

 

$

0.6

 

 

 

5

%

Operating Income

$

20.5

 

 

$

18.3

 

 

$

2.2

 

 

 

12

%

Operating Margin

 

19.8

%

 

 

21.4

%

 

 

(160

)

bps

 

 

First Quarter Electronics Segment Review

•
Higher sales were driven by improved demand in our health and wellness and recreational end markets, as well as successful capacity improvement initiatives, partially offset by supply chain constraints.
•
Gross profit and margin drivers: gross profit increased $2.8 million compared with the first quarter of the prior year, primarily due to the increased sales volume. Gross margin reflects price increases and fixed cost leverage on higher sales that were more than offset by increases in raw material, freight, logistics and labor costs.
•
Operating income increased $2.2 million, or 12%, while operating margin of 19.8% reflects flow through of gross margin offset by fixed cost leverage on higher sales and disciplined cost management.

Balance Sheet and Cash Flow Review

•
Total debt at quarter-end was $438.1 million compared with $445.0 million at January 2, 2022, reflecting repayments, net of borrowings, on our credit facilities of $4.3 million in the quarter.
•
Cash and cash equivalents at April 2, 2022 were $33.0 million, up $4.5 million from the end of 2021.
•
Inventory increased $14.7 million, or 8.9%, from the end of 2021 driven by the macro issues in the supply chain. These issues include the Company purchasing parts ahead of material shortages, holding some inventory for past due orders where one or two components have been delayed in the supply chain, along with customers changing shipping schedules once the Company has already manufactured the products.
•
Pro-forma net debt-to-adjusted EBITDA improved to 1.79x at the end of the first quarter of 2022 (pro-forma for NEM and Joyonway) compared with 1.89x (pro-forma for the NEM and Balboa acquisitions) at the end of 2021, further demonstrating the Company’s ability to de-lever the balance sheet following an acquisition. At the end of 2022 first quarter, the Company had $159.4 million available on its revolving lines of credit.
•
Net cash provided by operations was $14.7 million in the first quarter 2022 compared with $15.1 million in the prior-year period.
•
Capital expenditures were $5.6 million, or approximately 2% of sales. The Company expects to spend between 3% to 5% of sales in capital investments in 2022.
•
Paid 101st sequential quarterly cash dividend on April 20, 2022.

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 5

2022 Outlook

The Company reaffirms its expectations for 2022. This assumes constant currency, using quarter end rates, is based on organic growth only, and that markets served are not further impacted by the global pandemic or the geo-political environment.

 

2021 Actual

2022 Outlook

Consolidated revenue

$869.2 million

$930 - $950 million

Adjusted EBITDA

$214.1 million

$219 - $238 million

Adjusted EBITDA margin

24.6%

23.5% - 25.0%

Interest expense

$16.9 million

$14 - $15 million

Effective tax rate

20.3%

21% - 23%

Depreciation

$21.4 million

$24.5 - $26.5 million

Amortization

$33.0million

$28 - $29 million

Capital expenditures % total revenue

3%

3% - 5% of sales

Diluted Non-GAAP Cash EPS

$4.25

$4.35 - $4.60

Webcast

The Company will host a conference call and webcast tomorrow, May 10, 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, May 17, 2022. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13728206. 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 and 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

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 6

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) supply chain disruption and the potential inability to procure goods; (ii) conditions in the capital markets, including the interest rate environment and the availability of capital; (iii) inflation (including hyperinflation) or recession; (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; (v) 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, material costs, and work force and may have material adverse effects on our business, financial position, results of operations and/or cash flows; (vi) risks related to our international operations, including the potential impact of the ongoing conflict between Russia and Ukraine; and (vii) 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 1, 2022.

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, Adjusted EBITDA margin and Diluted non-GAAP cash EPS. 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 2022 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.

For more information, contact:
Tania Almond

Vice President, Investor Relations, Corporate Communication and Risk Management

(941) 362-1333

tania.almond@HLIO.com

Deborah Pawlowski
Kei Advisors LLC
(716) 843-3908
dpawlowski@keiadvisors.com

Financial Tables Follow:

 

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 7

HELIOS TECHNOLOGIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

 

 

April 2, 2022

 

 

April 3, 2021

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

240,547

 

 

$

204,844

 

 

 

17

%

 

Cost of sales

 

156,904

 

 

 

129,477

 

 

 

21

%

 

Gross profit

 

83,643

 

 

 

75,367

 

 

 

11

%

 

Gross margin

 

34.8

%

 

 

36.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, engineering and administrative expenses

 

33,776

 

 

 

30,561

 

 

 

11

%

 

Amortization of intangible assets

 

6,980

 

 

 

10,198

 

 

 

(32

)%

 

Operating income

 

42,887

 

 

 

34,608

 

 

 

24

%

 

Operating margin

 

17.8

%

 

 

16.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

3,809

 

 

 

4,751

 

 

 

(20

)%

 

Foreign currency transaction (gain) loss, net

 

(924

)

 

 

464

 

 

 

(299

)%

 

Other non-operating expense (income), net

 

750

 

 

 

(1

)

 

NM

 

 

Income before income taxes

 

39,252

 

 

 

29,394

 

 

 

34

%

 

Income tax provision

 

8,774

 

 

 

6,807

 

 

 

29

%

 

Net income

$

30,478

 

 

$

22,587

 

 

 

35

%

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.94

 

 

$

0.70

 

 

 

34

%

 

Diluted

$

0.94

 

 

$

0.70

 

 

 

34

%

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

32,439

 

 

 

32,193

 

 

 

 

 

Diluted

 

32,565

 

 

 

32,345

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

$

0.09

 

 

$

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM = Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 8

HELIOS TECHNOLOGIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

April 2, 2022

 

 

January 1, 2022

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

33,019

 

 

$

28,540

 

Restricted cash

 

39

 

 

 

41

 

Accounts receivable, net of allowance for

 

 

 

 

 

  credit losses of $1,119 and $1,212

 

151,350

 

 

 

134,561

 

Inventories, net

 

180,290

 

 

 

165,629

 

Income taxes receivable

 

1,796

 

 

 

2,762

 

Other current assets

 

21,871

 

 

 

20,101

 

Total current assets

 

388,365

 

 

 

351,634

 

Property, plant and equipment, net

 

170,411

 

 

 

174,210

 

Deferred income taxes

 

4,183

 

 

 

2,934

 

Goodwill

 

452,654

 

 

 

459,936

 

Other intangible assets, net

 

399,946

 

 

 

412,759

 

Other assets

 

19,322

 

 

 

13,873

 

Total assets

$

1,434,881

 

 

$

1,415,346

 

Liabilities and shareholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

89,117

 

 

$

85,301

 

Accrued compensation and benefits

 

18,636

 

 

 

28,595

 

Other accrued expenses and current liabilities

 

29,863

 

 

 

28,254

 

Current portion of long-term non-revolving debt, net

 

18,141

 

 

 

18,125

 

Dividends payable

 

2,924

 

 

 

2,917

 

Income taxes payable

 

14,362

 

 

 

6,328

 

Total current liabilities

 

173,043

 

 

 

169,520

 

Revolving line of credit

 

238,932

 

 

 

242,312

 

Long-term non-revolving debt, net

 

179,864

 

 

 

183,897

 

Deferred income taxes

 

70,144

 

 

 

71,836

 

Other noncurrent liabilities

 

37,262

 

 

 

38,818

 

Total liabilities

 

699,245

 

 

 

706,383

 

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,

 

 

 

 

 

   32,478 and 32,407 issued and outstanding

 

32

 

 

 

32

 

Capital in excess of par value

 

395,873

 

 

 

394,641

 

Retained earnings

 

390,831

 

 

 

363,279

 

Accumulated other comprehensive loss

 

(51,100

)

 

 

(48,989

)

Total shareholders’ equity

 

735,636

 

 

 

708,963

 

Total liabilities and shareholders’ equity

$

1,434,881

 

 

$

1,415,346

 

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 9

HELIOS TECHNOLOGIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

April 2, 2022

 

 

April 3, 2021

 

Cash flows from operating activities:

 

 

 

 

 

Net income

$

30,478

 

 

$

22,587

 

Adjustments to reconcile net income to

 

 

 

 

 

net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

12,554

 

 

 

15,237

 

Stock-based compensation expense

 

2,494

 

 

 

2,107

 

Amortization of debt issuance costs

 

125

 

 

 

125

 

Benefit for deferred income taxes

 

(1,082

)

 

 

(906

)

Forward contract gains, net

 

(1,577

)

 

 

(2,402

)

Other, net

 

696

 

 

 

32

 

(Increase) decrease in operating assets:

 

 

 

 

 

Accounts receivable

 

(17,418

)

 

 

(28,051

)

Inventories

 

(15,471

)

 

 

(10,809

)

Income taxes receivable

 

938

 

 

 

565

 

Other current assets

 

(2,403

)

 

 

(2,614

)

Other assets

 

2,202

 

 

 

2,139

 

Increase (decrease) in operating liabilities:

 

 

 

 

 

Accounts payable

 

4,136

 

 

 

13,912

 

Accrued expenses and other liabilities

 

(8,053

)

 

 

(2,147

)

Income taxes payable

 

8,177

 

 

 

6,126

 

Other noncurrent liabilities

 

(1,108

)

 

 

(819

)

Net cash provided by operating activities

 

14,688

 

 

 

15,082

 

Cash flows from investing activities:

 

 

 

 

 

Acquisition of a business, net of cash acquired

 

1,271

 

 

 

(1,000

)

Amounts paid for net assets acquired

 

-

 

 

 

(2,400

)

Capital expenditures

 

(5,630

)

 

 

(5,036

)

Proceeds from dispositions of equipment

 

1,837

 

 

 

35

 

Cash settlement of forward contracts

 

707

 

 

 

1,544

 

Software development costs

 

(874

)

 

 

(623

)

Net cash used in investing activities

 

(2,689

)

 

 

(7,480

)

Cash flows from financing activities:

 

 

 

 

 

Borrowings on revolving credit facilities

 

23,548

 

 

 

6,602

 

Repayment of borrowings on revolving credit facilities

 

(23,605

)

 

 

(8,500

)

Repayment of borrowings on long-term non-revolving debt

 

(4,201

)

 

 

(4,029

)

Proceeds from stock issued

 

600

 

 

 

333

 

Dividends to shareholders

 

(2,917

)

 

 

(2,891

)

Other financing activities

 

(2,259

)

 

 

(974

)

Net cash used in financing activities

 

(8,834

)

 

 

(9,459

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

1,312

 

 

 

2,565

 

Net increase in cash, cash equivalents and restricted cash

 

4,477

 

 

 

708

 

Cash, cash equivalents and restricted cash, beginning of period

 

28,581

 

 

 

25,257

 

Cash, cash equivalents and restricted cash, end of period

$

33,058

 

 

$

25,965

 

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 10

HELIOS TECHNOLOGIES

SEGMENT DATA

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

 

April 2, 2022

 

 

April 3, 2021

 

 

Sales:

 

 

 

 

 

 

Hydraulics

$

137,106

 

 

$

119,106

 

 

Electronics

 

103,441

 

 

 

85,738

 

 

Consolidated

$

240,547

 

 

$

204,844

 

 

 

 

 

 

 

 

 

Gross profit and margin:

 

 

 

 

 

 

Hydraulics

$

50,838

 

 

$

45,409

 

 

 

 

37.1

%

 

 

38.1

%

 

Electronics

 

32,805

 

 

 

29,958

 

 

 

 

31.7

%

 

 

35.0

%

 

Consolidated

$

83,643

 

 

$

75,367

 

 

 

 

34.8

%

 

 

36.8

%

 

 

 

 

 

 

 

 

Operating income (loss) and margin:

 

 

 

 

 

 

Hydraulics

$

31,633

 

 

$

28,073

 

 

 

 

23.1

%

 

 

23.6

%

 

Electronics

 

20,523

 

 

 

18,280

 

 

 

 

19.8

%

 

 

21.4

%

 

Corporate and other

 

(9,269

)

 

 

(11,745

)

 

Consolidated

$

42,887

 

 

$

34,608

 

 

 

 

17.8

%

 

 

16.9

%

 

ORGANIC AND ACQUIRED REVENUE

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

Full Year Ended

 

 

Three Months Ended

 

 

 

April 3,

 

 

July 3,

 

 

October 2,

 

 

January 1,

 

 

January 1,

 

 

April 2,

 

 

 

2021

 

 

2021

 

 

2021

 

 

2022

 

 

2022

 

 

2022

 

Hydraulics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic

 

$

119,106

 

 

$

133,039

 

 

$

128,672

 

 

$

125,200

 

 

$

506,017

 

 

$

130,691

 

Acquisition

 

 

-

 

 

 

-

 

 

 

4,732

 

 

 

5,700

 

 

 

10,432

 

 

 

6,415

 

Total

 

$

119,106

 

 

$

133,039

 

 

$

133,404

 

 

$

130,900

 

 

$

516,449

 

 

$

137,106

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic

 

$

29,459

 

 

$

30,191

 

 

$

30,808

 

 

$

66,107

 

 

$

156,565

 

 

$

102,663

 

Acquisition

 

 

56,279

 

 

 

60,183

 

 

 

59,029

 

 

 

20,680

 

 

 

196,171

 

 

 

778

 

Total

 

$

85,738

 

 

$

90,374

 

 

$

89,837

 

 

$

86,787

 

 

$

352,736

 

 

$

103,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Organic

 

$

148,565

 

 

$

163,230

 

 

$

159,480

 

 

$

191,307

 

 

$

662,582

 

 

$

233,354

 

Acquisition

 

 

56,279

 

 

 

60,183

 

 

 

63,761

 

 

 

26,380

 

 

 

206,603

 

 

 

7,193

 

Total

 

$

204,844

 

 

$

223,413

 

 

$

223,241

 

 

$

217,687

 

 

$

869,185

 

 

$

240,547

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 11

HELIOS TECHNOLOGIES

ADDITIONAL INFORMATION

(Unaudited)

2022 Sales by Geographic Region and Segment

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

% Change y/y

 

 

 

 

 

 

 

 

 

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

43.1

 

26%

 

 

 

 

 

 

 

 

 

Electronics

 

77.7

 

20%

 

 

 

 

 

 

 

 

 

Consol. Americas

 

120.8

 

22%

 

 

 

 

 

 

 

 

 

% of total

 

50

%

 

 

 

 

 

 

 

 

 

 

EMEA:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

52.9

 

22%

 

 

 

 

 

 

 

 

 

Electronics

 

11.8

 

27%

 

 

 

 

 

 

 

 

 

Consol. EMEA

 

64.7

 

23%

 

 

 

 

 

 

 

 

 

% of total

 

27

%

 

 

 

 

 

 

 

 

 

 

APAC:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

41.1

 

(1%)

 

 

 

 

 

 

 

 

 

Electronics

 

13.9

 

22%

 

 

 

 

 

 

 

 

 

Consol. APAC

 

55.0

 

4%

 

 

 

 

 

 

 

 

 

% of total

 

23

%

 

 

 

 

 

 

 

 

 

 

Total

$

240.5

 

17%

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021 Sales by Geographic Region and Segment

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

% Change y/y

Q2

 

% Change y/y

Q3

 

% Change y/y

Q4

 

% Change y/y

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

34.3

 

(8%)

$

41.7

 

22%

$

45.2

 

63%

$

46.5

 

49%

Electronics

 

65.0

 

201%

 

64.1

 

378%

 

64.2

 

200%

$

64.5

 

72%

Consol. Americas

 

99.3

 

69%

 

105.8

 

122%

 

109.4

 

123%

 

111.0

 

61%

% of total

 

48

%

 

 

47

%

 

 

49

%

 

51%

 

 

EMEA:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

43.3

 

29%

$

46.6

 

49%

$

44.8

 

40%

$

45.3

 

32%

Electronics

 

9.3

 

272%

 

11.0

 

479%

 

11.1

 

640%

$

10.6

 

116%

Consol. EMEA

 

52.6

 

46%

 

57.6

 

74%

 

55.9

 

66%

 

55.9

 

42%

% of total

 

26

%

 

 

26

%

 

 

25

%

 

 

26

%

 

APAC:

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

41.5

 

26%

$

44.7

 

22%

$

43.4

 

13%

$

39.1

 

5%

Electronics

 

11.4

 

613%

 

15.3

 

705%

 

14.5

 

867%

$

11.7

 

92%

Consol. APAC

 

52.9

 

53%

 

60.0

 

55%

 

57.9

 

45%

 

50.8

 

17%

% of total

 

26

%

 

 

27

%

 

 

26

%

 

 

23

%

 

Total

$

204.8

 

58%

$

223.4

 

87%

$

223.2

 

82%

$

217.7

 

44%

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 12

HELIOS TECHNOLOGIES

Non-GAAP Adjusted Operating Income RECONCILIATION

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

 

April 2, 2022

 

 

April 3, 2021

 

 

GAAP operating income

$

42,887

 

 

$

34,608

 

 

Acquisition-related amortization of intangible assets

 

6,980

 

 

 

10,198

 

 

Acquisition and financing-related expenses

 

859

 

 

 

922

 

 

Restructuring charges

 

268

 

 

 

418

 

 

Officer transition costs

 

302

 

 

 

-

 

 

Acquisition integration costs

 

1,119

 

 

 

594

 

 

Non-GAAP adjusted operating income

$

52,415

 

 

$

46,740

 

 

GAAP operating margin

 

17.8

%

 

 

16.9

%

 

Non-GAAP adjusted operating margin

 

21.8

%

 

 

22.8

%

 

 

 

 

 

 

 

 

Adjusted EBITDA RECONCILIATION

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

 

Twelve Months Ended

 

 

April 2, 2022

 

 

April 3, 2021

 

 

 

April 2, 2022

 

Net income

$

30,478

 

 

$

22,587

 

 

 

$

112,487

 

Interest expense, net

 

3,809

 

 

 

4,751

 

 

 

 

15,929

 

Income tax provision

 

8,774

 

 

 

6,807

 

 

 

 

28,550

 

Depreciation and amortization

 

12,554

 

 

 

15,237

 

 

 

 

51,718

 

EBITDA

 

55,615

 

 

 

49,382

 

 

 

 

208,684

 

Acquisition and financing-related expenses

 

859

 

 

 

922

 

 

 

 

5,678

 

Restructuring charges

 

268

 

 

 

418

 

 

 

 

323

 

Officer transition costs

 

302

 

 

 

-

 

 

 

 

619

 

Inventory step-up amortization

 

-

 

 

 

-

 

 

 

 

558

 

Acquisition integration costs

 

1,119

 

 

 

594

 

 

 

 

3,374

 

Change in fair value of contingent consideration

 

836

 

 

 

-

 

 

 

 

1,886

 

Other

 

-

 

 

 

-

 

 

 

 

626

 

Adjusted EBITDA

$

58,999

 

 

$

51,316

 

 

 

$

221,748

 

Adjusted EBITDA margin

 

24.5

%

 

 

25.1

%

 

 

 

24.5

%

 

 

 

 

 

 

 

 

 

 

Pre-acquisition adjusted EBITDA, NEM and Joyonway

 

 

 

 

 

 

 

 

4,334

 

TTM Pro forma adjusted EBITDA

 

 

 

 

 

 

 

$

226,082

 

 

 

 

 

Helios Technologies First Quarter 2022 Diluted Earnings per Share Grew 34% on a 17% Increase in Revenue Driven by Strong Execution

May 9, 2022

Page 13

HELIOS TECHNOLOGIES

Non-GAAP Cash Net Income RECONCILIATION

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

 

April 2, 2022

 

 

April 3, 2021

 

 

Net income

$

30,478

 

 

$

22,587

 

 

Amortization of intangible assets

 

7,105

 

 

 

10,231

 

 

Acquisition and financing-related expenses

 

859

 

 

 

922

 

 

Restructuring charges

 

268

 

 

 

418

 

 

Officer transition costs

 

302

 

 

 

-

 

 

Acquisition integration costs

 

1,119

 

 

 

594

 

 

Change in fair value of contingent consideration

 

836

 

 

 

-

 

 

Tax effect of above

 

(2,622

)

 

 

(3,041

)

 

Non-GAAP cash net income

$

38,345

 

 

$

31,711

 

 

Non-GAAP cash net income per diluted share

$

1.18

 

 

$

0.99

 

 

Net Debt-to-Adjusted EBITDA RECONCILIATION

(In thousands)

(Unaudited)

 

 

As of

 

 

 

April 2, 2022

 

Current portion of long-term non-revolving debt, net

 

$

18,141

 

Revolving lines of credit

 

 

240,086

 

Long-term non-revolving debt, net

 

 

179,864

 

Total debt

 

 

438,091

 

Less: Cash and cash equivalents

 

 

33,019

 

Net debt

 

$

405,072

 

 

 

 

 

TTM Pro forma adjusted EBITDA*

 

$

226,082

 

Ratio of net debt to TTM pro forma adjusted EBITDA

 

 

1.79

 

*On a pro-forma basis for NEM and Joyonway

 

 

 

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 2022 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.