Exhibit 99.1
NEWS
RELEASE
|
Exhibit 99.1 |
|
NEWS RELEASE |
FOR IMMEDIATE RELEASE
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
SARASOTA, FL, February 27, 2023 — 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 fourth quarter and full year ended December 31, 2022.
Josef Matosevic, the Company’s President and Chief Executive Officer, commented, “This has been a pivotal year for Helios. We advanced our technologies through internal innovation along with integration of flywheel acquisitions. We are also creating additional centers of excellence to service our customers through leveraging a best-in-class manufacturing and operating approach. Our teams executed well on our augmented strategy, navigating a complex operating environment, and protected the business ending the full year with industry-leading margins. We thought and acted globally as we diversified our markets and revenue base. Most importantly, we continue to build and develop the amazing talent that makes up our dedicated global workforce.”
Helios Technologies | 7456 16th St East | Sarasota, FL 34243 | 941-362-1200
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 2 of 20
He went on to say, “In 2023, we expect to build upon all our advancements made this past year. There is a high probability that global macroeconomic uncertainties and currency fluctuations will continue. We will remain focused on what we can control around product innovation, top-tier lead times, and our customer-centric, ‘in the region for the region’ approach to manufacturing and operational excellence. We recently acquired Schultes Precision Manufacturing adding additional customers and capabilities across several new markets. Combined with our organic growth and the Daman Products acquisition in the third quarter of 2022, we now expect to be able to reach our $1 billion revenue milestone with top-tier margins on a run rate basis ending 2023, not including any additional acquisitions in 2023. Importantly, at the mid-point of our diluted non-GAAP cash EPS range, we are still on track to hit our three-year CAGR growth rate of 22% established at our June 2021 investor day. Through our innovation strategy we are becoming a pure play Hydraulics and Electronics industry leader that we believe will be incredibly tough for our competition to follow.”
[1] Free cash flow is a non-GAAP financial measure; see supplemental slide for a reconciliation to the most comparable GAAP measure.
[2] On a pro-forma basis for Taimi and Daman Products; reflects non-GAAP measure
[3] Run rate basis defined as annualizing the anticipated fourth quarter of 2023 to equate to ~$1 billion in revenues
Fourth Quarter 2022 Consolidated Results
($ in millions, except per share data) |
Q4 2022 |
|
|
Q4 2021 |
|
|
Change |
|
|
% Change |
|
||||
Net sales |
$ |
196.0 |
|
|
$ |
217.7 |
|
|
$ |
(21.7 |
) |
|
|
(10 |
%) |
Gross profit |
$ |
63.2 |
|
|
$ |
74.3 |
|
|
$ |
(11.1 |
) |
|
|
(15 |
%) |
Gross margin |
|
32.2 |
% |
|
|
34.2 |
% |
|
|
(200 |
) |
bps |
|
|
|
Operating income |
$ |
20.7 |
|
|
$ |
31.9 |
|
|
$ |
(11.2 |
) |
|
|
(35 |
%) |
Operating margin |
|
10.6 |
% |
|
|
14.6 |
% |
|
|
(400 |
) |
bps |
|
|
|
Non-GAAP adjusted operating margin |
|
16.7 |
% |
|
|
19.8 |
% |
|
|
(310 |
) |
bps |
|
|
|
Net income |
$ |
17.5 |
|
|
$ |
23.6 |
|
|
$ |
(6.1 |
) |
|
|
(26 |
%) |
Diluted EPS |
$ |
0.54 |
|
|
$ |
0.72 |
|
|
$ |
(0.18 |
) |
|
|
(25 |
%) |
Non-GAAP cash net income |
$ |
25.4 |
|
|
$ |
32.9 |
|
|
$ |
(7.5 |
) |
|
|
(23 |
%) |
Diluted Non-GAAP cash EPS |
$ |
0.78 |
|
|
$ |
1.01 |
|
|
$ |
(0.23 |
) |
|
|
(23 |
%) |
Adjusted EBITDA |
$ |
39.2 |
|
|
$ |
49.3 |
|
|
$ |
(10.1 |
) |
|
|
(20 |
%) |
Adjusted EBITDA margin |
|
20.0 |
% |
|
|
22.7 |
% |
|
|
(270 |
) |
bps |
|
|
|
See the attached tables for additional important disclosures regarding Helios’ use of non-GAAP adjusted operating income, non-GAAP adjusted operating margin, non-GAAP cash net income, non-GAAP cash net income per share, adjusted EBITDA (earnings before net interest expense, income taxes, depreciation, amortization and certain other charges), adjusted EBITDA margin (adjusted EBITDA as a percentage of sales), net debt-to-adjusted EBITDA, and sales in constant currency, as well as reconciliations of GAAP operating income to non-GAAP adjusted operating income and non-GAAP adjusted operating margin, GAAP net income to non-GAAP cash net income, non-GAAP cash earnings per share, adjusted EBITDA and Adjusted EBITDA margin, net debt-to-adjusted EBITDA, and net sales to sales in constant currency. 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
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 3 of 20
Profits and margins
Non-operating items
Net income, earnings per share, non-GAAP cash earnings per share and adjusted EBITDA
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 4 of 20
2022 Consolidated Results
($ in millions, except per share data) |
2022 |
|
|
2021 |
|
|
Change |
|
|
% Change |
|
||||
Net sales |
$ |
885.4 |
|
|
$ |
869.2 |
|
|
$ |
16.2 |
|
|
|
2 |
% |
Gross profit |
$ |
298.5 |
|
|
$ |
312.8 |
|
|
$ |
(14.3 |
) |
|
|
(5 |
%) |
Gross margin |
|
33.7 |
% |
|
|
36.0 |
% |
|
|
(230 |
) |
bps |
|
|
|
Operating income |
$ |
137.3 |
|
|
$ |
149.3 |
|
|
$ |
(12.0 |
) |
|
|
(8 |
%) |
Operating margin |
|
15.5 |
% |
|
|
17.2 |
% |
|
|
(170 |
) |
bps |
|
|
|
Non-GAAP adjusted operating margin |
|
20.4 |
% |
|
|
22.1 |
% |
|
|
(170 |
) |
bps |
|
|
|
Net income |
$ |
98.4 |
|
|
$ |
104.6 |
|
|
$ |
(6.2 |
) |
|
|
(6 |
%) |
Diluted EPS |
$ |
3.02 |
|
|
$ |
3.22 |
|
|
$ |
(0.20 |
) |
|
|
(6 |
%) |
Non-GAAP cash net income |
$ |
131.3 |
|
|
$ |
138.1 |
|
|
$ |
(6.8 |
) |
|
|
(5 |
%) |
Diluted Non-GAAP cash EPS |
$ |
4.03 |
|
|
$ |
4.25 |
|
|
$ |
(0.22 |
) |
|
|
(5 |
%) |
Adjusted EBITDA |
$ |
205.3 |
|
|
$ |
214.1 |
|
|
$ |
(8.8 |
) |
|
|
(4 |
%) |
Adjusted EBITDA margin |
|
23.2 |
% |
|
|
24.6 |
% |
|
|
(140 |
) |
bps |
|
|
|
See the attached tables for additional important disclosures regarding Helios’ use of non-GAAP adjusted operating income, non-GAAP adjusted operating margin, non-GAAP cash net income, non-GAAP cash net income per share, adjusted EBITDA (earnings before net interest expense, income taxes, depreciation, amortization and certain other charges), adjusted EBITDA margin (adjusted EBITDA as a percentage of sales), net debt-to-adjusted EBITDA, and sales in constant currency, as well as reconciliations of GAAP operating income to non-GAAP adjusted operating income and non-GAAP adjusted operating margin, GAAP net income to non-GAAP cash net income, non-GAAP cash earnings per share, adjusted EBITDA and Adjusted EBITDA margin, net debt-to-adjusted EBITDA, and net sales to sales in constant currency. 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
Profits and margins
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 5 of 20
Non-operating items
Net income, earnings per share, non-GAAP cash earnings per share and adjusted EBITDA
Hydraulics Segment Review
(Refer to sales by geographic region and segment data in accompanying tables)
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
For the Three Months Ended |
|
|
|
|
|
|
|
|
|||||||
|
Q4 2022 |
|
|
Q4 2021 |
|
|
Change |
|
|
% Change |
|
|
||||
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Americas |
$ |
56.8 |
|
|
$ |
46.5 |
|
|
$ |
10.3 |
|
|
|
22 |
% |
|
EMEA |
|
43.3 |
|
|
|
45.3 |
|
|
|
(2.0 |
) |
|
|
(4 |
%) |
|
APAC |
|
40.1 |
|
|
|
39.1 |
|
|
|
1.0 |
|
|
|
3 |
% |
|
Total Segment Sales |
$ |
140.2 |
|
|
$ |
130.9 |
|
|
$ |
9.3 |
|
|
|
7 |
% |
|
Gross Profit |
$ |
48.6 |
|
|
$ |
46.8 |
|
|
$ |
1.8 |
|
|
|
4 |
% |
|
Gross Margin |
|
34.7 |
% |
|
|
35.8 |
% |
|
|
(110 |
) |
bps |
|
|
|
|
SEA Expenses |
$ |
18.0 |
|
|
$ |
19.2 |
|
|
$ |
(1.2 |
) |
|
|
(6 |
%) |
|
Operating Income |
$ |
30.6 |
|
|
$ |
27.6 |
|
|
$ |
3.0 |
|
|
|
11 |
% |
|
Operating Margin |
|
21.8 |
% |
|
|
21.1 |
% |
|
|
70 |
|
bps |
|
|
|
|
Fourth Quarter Hydraulics Segment Review
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 6 of 20
Electronics Segment Review
(Refer to sales by geographic region and segment data in accompanying tables)
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|||||
Electronics |
For the Three Months Ended |
|
|
|
|
|
|
|
|||||||
|
Q4 2022 |
|
|
Q4 2021 |
|
|
Change |
|
|
% Change |
|
||||
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
||||
Americas |
$ |
48.0 |
|
|
$ |
64.5 |
|
|
$ |
(16.5 |
) |
|
|
(26 |
%) |
EMEA |
|
5.3 |
|
|
|
10.6 |
|
|
|
(5.3 |
) |
|
|
(50 |
%) |
APAC |
|
2.5 |
|
|
|
11.7 |
|
|
|
(9.2 |
) |
|
|
(79 |
%) |
Total Segment Sales |
$ |
55.8 |
|
|
$ |
86.8 |
|
|
$ |
(31.0 |
) |
|
|
(36 |
%) |
Gross Profit |
$ |
14.6 |
|
|
$ |
27.5 |
|
|
$ |
(12.9 |
) |
|
|
(47 |
%) |
Gross Margin |
|
26.2 |
% |
|
|
31.7 |
% |
|
|
(550 |
) |
bps |
|
|
|
SEA Expenses |
$ |
13.9 |
|
|
$ |
12.1 |
|
|
$ |
1.8 |
|
|
|
15 |
% |
Operating Income |
$ |
0.7 |
|
|
$ |
15.4 |
|
|
$ |
(14.7 |
) |
|
|
(95 |
%) |
Operating Margin |
|
1.3 |
% |
|
|
17.7 |
% |
|
|
(1640 |
) |
bps |
|
|
|
Fourth Quarter Electronics Segment Review
Balance Sheet and Cash Flow Review
Tricia Fulton, Executive Vice President and Chief Financial Officer, commented, “We continue to navigate well despite the difficult macroeconomic environment, which has created overall uncertainty, higher interest rates, and lower consumer demand in some of our end markets. We have strong financial flexibility, which is paramount in this market, and have maintained industry leading adjusted EBITDA margins for the full year. Our strong cash flow generation has resulted in a net debt to adjusted EBITDA leverage ratio of only 1.9x. We have continued to invest our capital into developing our advanced technologies through product innovations, executing on our flywheel acquisition strategy, as well as our manufacturing and operating strategy. Those investments are starting to drive productivity, margin enhancement and efficiencies, as well as leveraging ‘in the region, for the region’ operations to protect earnings and cash flow.”
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 7 of 20
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 8 of 20
2023 Outlook: Path to Hit 22% Three-Year Earnings4 CAGR
The following provides the Company’s expectations for 2023 as of February 27, 2023. This does not include any potential future flywheel acquisitions it may make through the course of the year. This assumes constant currency, using quarter end rates, and that markets served are not further impacted by the global pandemic or the geo-political environment. On a run-rate basis ending 2023, the Company expects to reach approximately $1 billion in revenue and approximately 25% Adjusted EBITDA margins.
|
2020 Actual |
2021 Actual |
2022 Actual |
2023 Outlook |
Implied 3-Year CAGR at 2023 range mid-point |
Exiting 2023 |
Consolidated revenue |
$523 million |
$869 million |
$885 million |
$910 - $940 million |
21% |
~$1 billion |
Net income |
$14 million |
$105 million |
$98 million |
$99 - $104 million |
|
|
Adjusted EBITDA |
$121 million |
$214 million |
$205 million |
$214 - $226 million |
22% |
|
Adjusted EBITDA margin |
23.2% |
24.6% |
23.2% |
23.5% - 24.0% |
+55 bps |
~25% |
Interest expense |
$13 million |
$17 million |
$17 million |
$23 - $24 million |
|
|
Effective tax rate |
18% |
20% |
19% |
21% - 23% |
|
|
Depreciation |
$18 million |
$21 million |
$23 million |
$27 - $29 million |
|
|
Amortization |
$22 million |
$33 million |
$29 million |
$30 - $32 million |
|
|
Capital expenditures % total revenue |
3% |
3% |
4% |
3% - 5% of sales |
|
|
Diluted EPS |
$0.44 |
$3.22 |
$3.02 |
$3.03 - $3.18 |
|
|
Diluted Non-GAAP Cash EPS |
$2.24 |
$4.25 |
$4.03 |
$3.95 - $4.10 |
22% |
|
Adjusted EBITDA, Adjusted EBITDA margin and Diluted Non-GAAP Cash EPS represent non-GAAP financial measures. The Company has also presented the related GAAP measures. For 2023, Adjusted EBITDA excludes an estimated $7-$8 million of costs for restructuring activities and acquisition related cost including integration. For 2023, Diluted non-GAAP Cash EPS excludes an estimated $0.88 to $0.95 per diluted share of costs for amortization, restructuring activities, acquisition related costs including integration and the related tax impact on these items.
[4] Implied three-year Earnings Compound Annual Growth Rate (CAGR) = Diluted Non-GAAP Cash EPS growth calculated between 2020A to the mid-point of 2023 Outlook issued February 27, 2023.
Webcast
The Company will host a conference call and webcast tomorrow, February 28, 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, March 7, 2023. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13735199. 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.
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 9 of 20
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 and follow us on LinkedIn.
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) 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, including, without limitation, the current COVID-19 pandemic, particularly in China, 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; (viii) our failure to realize the benefits expected from acquisitions, our failure to promptly and effectively integrate acquisitions and the ability of Helios to retain and hire key personnel, and maintain relationships with suppliers. 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 and the Company’s Form 10-K for the year ended December 31, 2022 to be filed with the Securities and Exchange Commission on February 28, 2023.
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.
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 10 of 20
This news release also presents forward-looking statements regarding non-GAAP measures. 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 and Corporate Communication
(941) 362-1333
tania.almond@HLIO.com
Deborah Pawlowski
Kei Advisors LLC
(716) 843-3908
dpawlowski@keiadvisors.com
Financial Tables Follow:
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 11 of 20
HELIOS TECHNOLOGIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
|
For the Three Months Ended (unaudited) |
|
|
For the Year Ended |
|
||||||||||||||||||
|
December 31, 2022 |
|
|
January 1, 2022 |
|
|
% Change |
|
|
December 31, 2022 |
|
|
January 1, 2022 |
|
|
% Change |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales |
$ |
196.0 |
|
|
$ |
217.7 |
|
|
|
(10 |
)% |
|
$ |
885.4 |
|
|
$ |
869.2 |
|
|
|
2 |
% |
Cost of sales |
|
132.8 |
|
|
|
143.4 |
|
|
|
(7 |
)% |
|
|
586.9 |
|
|
|
556.4 |
|
|
|
5 |
% |
Gross profit |
|
63.2 |
|
|
|
74.3 |
|
|
|
(15 |
)% |
|
|
298.5 |
|
|
|
312.8 |
|
|
|
(5 |
)% |
Gross margin |
|
32.2 |
% |
|
|
34.2 |
% |
|
|
|
|
|
33.7 |
% |
|
|
36.0 |
% |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling, engineering and administrative expenses |
|
35.0 |
|
|
|
34.9 |
|
|
|
0 |
% |
|
|
133.1 |
|
|
|
130.7 |
|
|
|
2 |
% |
Amortization of intangible assets |
|
7.5 |
|
|
|
7.5 |
|
|
|
- |
% |
|
|
28.1 |
|
|
|
32.8 |
|
|
|
(14 |
)% |
Operating income |
|
20.7 |
|
|
|
31.9 |
|
|
|
(35 |
)% |
|
|
137.3 |
|
|
|
149.3 |
|
|
|
(8 |
)% |
Operating margin |
|
10.6 |
% |
|
|
14.6 |
% |
|
|
|
|
|
15.5 |
% |
|
|
17.2 |
% |
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense, net |
|
5.0 |
|
|
|
3.9 |
|
|
|
28 |
% |
|
|
16.7 |
|
|
|
16.9 |
|
|
|
(1 |
)% |
Foreign currency transaction loss (gain), net |
|
0.4 |
|
|
|
(0.3 |
) |
|
|
(233 |
)% |
|
|
(0.9 |
) |
|
|
1.0 |
|
|
|
(190 |
)% |
Other non-operating (income) expense, net |
|
(1.8 |
) |
|
|
1.0 |
|
|
|
(280 |
)% |
|
|
(0.3 |
) |
|
|
0.2 |
|
|
|
(250 |
)% |
Income before income taxes |
|
17.1 |
|
|
|
27.3 |
|
|
|
(37 |
)% |
|
|
121.8 |
|
|
|
131.2 |
|
|
|
(7 |
)% |
Income tax (benefit) provision |
|
(0.4 |
) |
|
|
3.7 |
|
|
|
(111 |
)% |
|
|
23.4 |
|
|
|
26.6 |
|
|
|
(12 |
)% |
Net income |
$ |
17.5 |
|
|
$ |
23.6 |
|
|
|
(26 |
)% |
|
$ |
98.4 |
|
|
$ |
104.6 |
|
|
|
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.54 |
|
|
$ |
0.73 |
|
|
|
(26 |
)% |
|
$ |
3.03 |
|
|
$ |
3.24 |
|
|
|
(6 |
)% |
Diluted |
$ |
0.54 |
|
|
$ |
0.72 |
|
|
|
(25 |
)% |
|
$ |
3.02 |
|
|
$ |
3.22 |
|
|
|
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic |
|
32.6 |
|
|
|
32.4 |
|
|
|
|
|
|
32.5 |
|
|
|
32.3 |
|
|
|
|
||
Diluted |
|
32.6 |
|
|
|
32.6 |
|
|
|
|
|
|
32.6 |
|
|
|
32.5 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Dividends declared per share |
$ |
0.09 |
|
|
$ |
0.09 |
|
|
|
|
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 12 of 20
HELIOS TECHNOLOGIES
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
|
December 31, 2022 |
|
|
January 1, 2022 |
|
||
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
||
Cash and cash equivalents |
$ |
43.7 |
|
|
$ |
28.5 |
|
Accounts receivable, net of allowance for |
|
|
|
|
|
||
credit losses of $1.5 and $1.2 |
|
125.1 |
|
|
|
134.6 |
|
Inventories, net |
|
191.6 |
|
|
|
165.6 |
|
Income taxes receivable |
|
10.2 |
|
|
|
2.8 |
|
Other current assets |
|
17.9 |
|
|
|
20.1 |
|
Total current assets |
|
388.5 |
|
|
|
351.6 |
|
Property, plant and equipment, net |
|
175.7 |
|
|
|
174.2 |
|
Deferred income taxes |
|
1.6 |
|
|
|
2.9 |
|
Goodwill |
|
468.5 |
|
|
|
459.9 |
|
Other intangible assets, net |
|
405.6 |
|
|
|
412.8 |
|
Other assets |
|
23.8 |
|
|
|
13.9 |
|
Total assets |
$ |
1,463.7 |
|
|
$ |
1,415.3 |
|
Liabilities and shareholders’ equity |
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Accounts payable |
$ |
73.7 |
|
|
$ |
85.3 |
|
Accrued compensation and benefits |
|
21.1 |
|
|
|
28.6 |
|
Other accrued expenses and current liabilities |
|
32.0 |
|
|
|
28.4 |
|
Current portion of long-term non-revolving debt, net |
|
19.0 |
|
|
|
18.1 |
|
Dividends payable |
|
2.9 |
|
|
|
2.9 |
|
Income taxes payable |
|
3.6 |
|
|
|
6.3 |
|
Total current liabilities |
|
152.3 |
|
|
|
169.6 |
|
Revolving line of credit |
|
261.3 |
|
|
|
242.3 |
|
Long-term non-revolving debt, net |
|
164.2 |
|
|
|
183.9 |
|
Deferred income taxes |
|
61.0 |
|
|
|
71.8 |
|
Other noncurrent liabilities |
|
30.0 |
|
|
|
38.7 |
|
Total liabilities |
|
668.8 |
|
|
|
706.3 |
|
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, |
|
|
|
|
|
||
32.6 and 32.4 issued and outstanding |
|
- |
|
|
|
- |
|
Capital in excess of par value |
|
404.3 |
|
|
|
394.6 |
|
Retained earnings |
|
450.0 |
|
|
|
363.3 |
|
Accumulated other comprehensive loss |
|
(59.4 |
) |
|
|
(49.0 |
) |
Total shareholders’ equity |
|
794.9 |
|
|
|
709.0 |
|
Total liabilities and shareholders’ equity |
$ |
1,463.7 |
|
|
$ |
1,415.3 |
|
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 13 of 20
HELIOS TECHNOLOGIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
|
For the Year Ended |
|
|||||
|
December 31, 2022 |
|
|
January 1, 2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
||
Net income |
$ |
98.4 |
|
|
$ |
104.6 |
|
Adjustments to reconcile net income to |
|
|
|
|
|
||
net cash provided by operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
51.6 |
|
|
|
54.4 |
|
Stock-based compensation expense |
|
8.6 |
|
|
|
8.9 |
|
Amortization of debt issuance costs |
|
0.5 |
|
|
|
0.5 |
|
Benefit for deferred income taxes |
|
(4.5 |
) |
|
|
(1.4 |
) |
Amortization of acquisition- related inventory step up |
|
- |
|
|
|
0.6 |
|
Forward contract gains, net |
|
(4.0 |
) |
|
|
(4.7 |
) |
Other, net |
|
- |
|
|
|
0.1 |
|
(Increase) decrease in, net of acquisitions: |
|
|
|
|
|
||
Accounts receivable |
|
9.1 |
|
|
|
(32.4 |
) |
Inventories |
|
(27.0 |
) |
|
|
(52.5 |
) |
Income taxes receivable |
|
(5.0 |
) |
|
|
(0.7 |
) |
Other current assets |
|
1.6 |
|
|
|
0.7 |
|
Other assets |
|
8.0 |
|
|
|
5.1 |
|
Increase (decrease) in, net of acquisitions: |
|
|
|
|
|
||
Accounts payable |
|
(11.5 |
) |
|
|
23.8 |
|
Accrued expenses and other liabilities |
|
(6.2 |
) |
|
|
8.1 |
|
Income taxes payable |
|
(2.3 |
) |
|
|
5.7 |
|
Other noncurrent liabilities |
|
(7.4 |
) |
|
|
(7.7 |
) |
Net cash provided by operating activities |
|
109.9 |
|
|
|
113.1 |
|
Cash flows from investing activities: |
|
|
|
|
|
||
Business acquisitions, net of cash acquired |
|
(67.3 |
) |
|
|
(61.1 |
) |
Capital expenditures |
|
(31.9 |
) |
|
|
(26.8 |
) |
Proceeds from dispositions of property, plant and equipment |
|
7.2 |
|
|
|
0.2 |
|
Cash settlement of forward contracts |
|
4.3 |
|
|
|
2.4 |
|
Software development costs |
|
(3.1 |
) |
|
|
(2.6 |
) |
Amounts paid for net assets acquired |
|
- |
|
|
|
(2.4 |
) |
Net cash used in investing activities |
|
(90.8 |
) |
|
|
(90.3 |
) |
Cash flows from financing activities: |
|
|
|
|
|
||
Borrowings on revolving credit facilities |
|
118.7 |
|
|
|
81.2 |
|
Repayment of borrowings on revolving credit facilities |
|
(92.7 |
) |
|
|
(86.8 |
) |
Borrowings on long-term non-revolving debt |
|
- |
|
|
|
12.0 |
|
Repayment of borrowings on long-term non-revolving debt |
|
(18.0 |
) |
|
|
(16.2 |
) |
Proceeds from stock issued |
|
2.1 |
|
|
|
1.8 |
|
Dividends to shareholders |
|
(11.7 |
) |
|
|
(11.6 |
) |
Payment of employee tax withholding on equity award vestings |
|
(2.6 |
) |
|
|
(1.4 |
) |
Other financing activities |
|
(2.7 |
) |
|
|
(1.6 |
) |
Net cash used in financing activities |
|
(6.9 |
) |
|
|
(22.6 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
3.0 |
|
|
|
3.0 |
|
Net increase in cash and cash equivalents |
|
15.2 |
|
|
|
3.2 |
|
Cash and cash equivalents, beginning of period |
|
28.5 |
|
|
|
25.3 |
|
Cash and cash equivalents, end of period |
$ |
43.7 |
|
|
$ |
28.5 |
|
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 14 of 20
HELIOS TECHNOLOGIES
SEGMENT DATA
(In millions)
(Unaudited)
|
For the Three Months Ended |
|
|
For the Year Ended |
|
||||||||||
|
December 31, 2022 |
|
|
January 1, 2022 |
|
|
December 31, 2022 |
|
|
January 1, 2022 |
|
||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
||||
Hydraulics |
$ |
140.2 |
|
|
$ |
130.9 |
|
|
$ |
551.3 |
|
|
$ |
516.4 |
|
Electronics |
|
55.8 |
|
|
|
86.8 |
|
|
|
334.1 |
|
|
|
352.7 |
|
Consolidated |
$ |
196.0 |
|
|
$ |
217.7 |
|
|
$ |
885.4 |
|
|
$ |
869.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit and margin: |
|
|
|
|
|
|
|
|
|
|
|
||||
Hydraulics |
$ |
48.6 |
|
|
$ |
46.8 |
|
|
$ |
195.5 |
|
|
$ |
193.4 |
|
|
|
34.7 |
% |
|
|
35.8 |
% |
|
|
35.5 |
% |
|
|
37.5 |
% |
Electronics |
|
14.6 |
|
|
|
27.5 |
|
|
|
103.0 |
|
|
|
120.0 |
|
|
|
26.2 |
% |
|
|
31.7 |
% |
|
|
30.8 |
% |
|
|
34.0 |
% |
Corporate and other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.6 |
) |
Consolidated |
$ |
63.2 |
|
|
$ |
74.3 |
|
|
$ |
298.5 |
|
|
$ |
312.8 |
|
|
|
32.2 |
% |
|
|
34.2 |
% |
|
|
33.7 |
% |
|
|
36.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) and margin: |
|
|
|
|
|
|
|
|
|
|
|
||||
Hydraulics |
$ |
30.6 |
|
|
$ |
27.6 |
|
|
$ |
122.7 |
|
|
$ |
119.8 |
|
|
|
21.8 |
% |
|
|
21.1 |
% |
|
|
22.3 |
% |
|
|
23.2 |
% |
Electronics |
|
0.7 |
|
|
|
15.4 |
|
|
|
52.5 |
|
|
|
71.7 |
|
|
|
1.3 |
% |
|
|
17.7 |
% |
|
|
15.7 |
% |
|
|
20.3 |
% |
Corporate and other |
|
(10.6 |
) |
|
|
(11.1 |
) |
|
|
(37.9 |
) |
|
|
(42.2 |
) |
Consolidated |
$ |
20.7 |
|
|
$ |
31.9 |
|
|
$ |
137.3 |
|
|
$ |
149.3 |
|
|
|
10.6 |
% |
|
|
14.6 |
% |
|
|
15.5 |
% |
|
|
17.2 |
% |
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 15 of 20
ORGANIC AND ACQUIRED REVENUE5
(In millions)
(Unaudited)
|
|
Three Months Ended |
|
|
Full Year Ended |
|
|
Three Months Ended |
|
|
Full Year Ended |
|
||||||||||||||||||||||||||||
|
|
April 3, |
|
|
July 3, |
|
|
October 2, |
|
|
January 1, |
|
|
January 1, |
|
|
April 2, |
|
|
July 2, |
|
|
October 1, |
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
|
2021 |
|
|
2021 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
|
2022 |
|
||||||||||
Hydraulics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Organic |
|
$ |
119.1 |
|
|
$ |
133.0 |
|
|
$ |
128.7 |
|
|
$ |
125.2 |
|
|
$ |
506.0 |
|
|
$ |
130.7 |
|
|
$ |
137.1 |
|
|
$ |
129.1 |
|
|
$ |
132.0 |
|
|
$ |
528.9 |
|
Acquisition |
|
|
- |
|
|
|
- |
|
|
|
4.7 |
|
|
|
5.7 |
|
|
|
10.4 |
|
|
|
6.4 |
|
|
|
5.7 |
|
|
|
2.1 |
|
|
|
8.2 |
|
|
|
22.4 |
|
Total |
|
$ |
119.1 |
|
|
$ |
133.0 |
|
|
$ |
133.4 |
|
|
$ |
130.9 |
|
|
$ |
516.4 |
|
|
$ |
137.1 |
|
|
$ |
142.8 |
|
|
$ |
131.2 |
|
|
$ |
140.2 |
|
|
$ |
551.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Electronics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Organic |
|
$ |
29.5 |
|
|
$ |
30.2 |
|
|
$ |
30.8 |
|
|
$ |
66.1 |
|
|
$ |
156.6 |
|
|
$ |
102.7 |
|
|
$ |
97.9 |
|
|
$ |
75.2 |
|
|
$ |
55.8 |
|
|
$ |
331.6 |
|
Acquisition |
|
|
56.3 |
|
|
|
60.2 |
|
|
|
59.0 |
|
|
|
20.7 |
|
|
|
196.2 |
|
|
|
0.8 |
|
|
|
1.0 |
|
|
|
0.7 |
|
|
|
- |
|
|
|
2.5 |
|
Total |
|
$ |
85.8 |
|
|
$ |
90.4 |
|
|
$ |
89.8 |
|
|
$ |
86.8 |
|
|
$ |
352.7 |
|
|
$ |
103.4 |
|
|
$ |
98.9 |
|
|
$ |
75.9 |
|
|
$ |
55.8 |
|
|
$ |
334.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Organic |
|
$ |
148.6 |
|
|
$ |
163.2 |
|
|
$ |
159.5 |
|
|
$ |
191.3 |
|
|
$ |
662.6 |
|
|
$ |
233.4 |
|
|
$ |
235.0 |
|
|
$ |
204.3 |
|
|
$ |
187.8 |
|
|
$ |
860.5 |
|
Acquisition |
|
|
56.3 |
|
|
|
60.2 |
|
|
|
63.8 |
|
|
|
26.4 |
|
|
|
206.6 |
|
|
|
7.2 |
|
|
|
6.6 |
|
|
|
2.9 |
|
|
|
8.2 |
|
|
|
24.9 |
|
Total |
|
$ |
204.9 |
|
|
$ |
223.4 |
|
|
$ |
223.3 |
|
|
$ |
217.7 |
|
|
$ |
869.2 |
|
|
$ |
240.5 |
|
|
$ |
241.7 |
|
|
$ |
207.2 |
|
|
$ |
196.0 |
|
|
$ |
885.4 |
|
[5] Revenue is considered to be acquisition related until the acquisition has been included in the Company’s financial results for one full year.
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 16 of 20
HELIOS TECHNOLOGIES
ADDITIONAL INFORMATION
(Unaudited)
2022 Sales by Geographic Region and Segment |
|
|
|
|
|
|
|
|
|
|||||||||||
($ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Q1 |
|
% Change y/y |
Q2 |
|
% Change y/y |
Q3 |
|
% Change y/y |
Q4 |
|
% Change y/y |
YTD 2022 |
|
% Change y/y |
|||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
43.1 |
|
26% |
$ |
49.9 |
|
20% |
$ |
49.7 |
|
10% |
$ |
56.8 |
|
22% |
$ |
199.5 |
|
19% |
Electronics |
|
77.7 |
|
20% |
|
80.2 |
|
25% |
|
65.0 |
|
1% |
|
48.0 |
|
(26%) |
|
270.9 |
|
5% |
Consol. Americas |
|
120.8 |
|
22% |
|
130.1 |
|
23% |
|
114.7 |
|
5% |
|
104.8 |
|
(6%) |
|
470.4 |
|
11% |
% of total |
|
50 |
% |
|
|
54 |
% |
|
|
55 |
% |
|
|
53 |
% |
|
|
53 |
% |
|
EMEA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
52.9 |
|
22% |
$ |
49.0 |
|
5% |
$ |
41.3 |
|
(8%) |
$ |
43.3 |
|
(4%) |
$ |
186.5 |
|
4% |
Electronics |
|
11.8 |
|
27% |
|
12.3 |
|
12% |
|
7.7 |
|
(31%) |
|
5.3 |
|
(50%) |
|
37.1 |
|
(12%) |
Consol. EMEA |
|
64.7 |
|
23% |
|
61.3 |
|
6% |
|
49.0 |
|
(12%) |
|
48.6 |
|
(13%) |
|
223.6 |
|
1% |
% of total |
|
27 |
% |
|
|
25 |
% |
|
|
24 |
% |
|
|
25 |
% |
|
|
25 |
% |
|
APAC: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
41.1 |
|
(1%) |
$ |
43.9 |
|
(2%) |
$ |
40.2 |
|
(7%) |
$ |
40.1 |
|
3% |
$ |
165.3 |
|
(2%) |
Electronics |
|
13.9 |
|
22% |
|
6.4 |
|
(58%) |
|
3.3 |
|
(77%) |
|
2.5 |
|
(79%) |
|
26.1 |
|
(51%) |
Consol. APAC |
|
55.0 |
|
4% |
|
50.3 |
|
(16%) |
|
43.5 |
|
(25%) |
|
42.6 |
|
(16%) |
|
191.4 |
|
(14%) |
% of total |
|
23 |
% |
|
|
21 |
% |
|
|
21 |
% |
|
|
22 |
% |
|
|
22 |
% |
|
Total |
$ |
240.5 |
|
17% |
$ |
241.7 |
|
8% |
$ |
207.2 |
|
(7%) |
$ |
196.0 |
|
(10%) |
$ |
885.4 |
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
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 |
YTD 2021 |
|
% Change y/y |
|||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
34.3 |
|
(8%) |
$ |
41.7 |
|
22% |
$ |
45.2 |
|
63% |
$ |
46.5 |
|
49% |
$ |
167.7 |
|
29% |
Electronics |
|
65.0 |
|
201% |
|
64.1 |
|
378% |
|
64.2 |
|
200% |
$ |
64.5 |
|
72% |
|
257.8 |
|
175% |
Consol. Americas |
|
99.3 |
|
69% |
|
105.8 |
|
122% |
|
109.4 |
|
123% |
|
111.0 |
|
61% |
|
425.5 |
|
90% |
% of total |
|
48 |
% |
|
|
47 |
% |
|
|
49 |
% |
|
51% |
|
|
|
49 |
% |
|
|
EMEA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
43.3 |
|
29% |
$ |
46.6 |
|
49% |
$ |
44.8 |
|
40% |
$ |
45.3 |
|
32% |
$ |
180.0 |
|
37% |
Electronics |
|
9.3 |
|
272% |
|
11.0 |
|
479% |
|
11.1 |
|
640% |
|
10.6 |
|
116% |
|
42.0 |
|
289% |
Consol. EMEA |
|
52.6 |
|
46% |
|
57.6 |
|
74% |
|
55.9 |
|
66% |
|
55.9 |
|
42% |
|
222.0 |
|
56% |
% of total |
|
26 |
% |
|
|
26 |
% |
|
|
25 |
% |
|
|
26 |
% |
|
|
26 |
% |
|
APAC: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Hydraulics |
$ |
41.5 |
|
26% |
$ |
44.7 |
|
22% |
$ |
43.4 |
|
13% |
$ |
39.1 |
|
5% |
$ |
168.7 |
|
16% |
Electronics |
|
11.4 |
|
613% |
|
15.3 |
|
705% |
|
14.5 |
|
867% |
$ |
11.7 |
|
92% |
|
52.9 |
|
377% |
Consol. APAC |
|
52.9 |
|
53% |
|
60.0 |
|
55% |
|
57.9 |
|
45% |
|
50.8 |
|
17% |
|
221.7 |
|
42% |
% of total |
|
26 |
% |
|
|
27 |
% |
|
|
26 |
% |
|
|
23 |
% |
|
|
26 |
% |
|
Total |
$ |
204.8 |
|
58% |
$ |
223.4 |
|
87% |
$ |
223.2 |
|
82% |
$ |
217.7 |
|
44% |
$ |
869.2 |
|
66% |
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 17 of 20
HELIOS TECHNOLOGIES
Non-GAAP Adjusted Operating Income RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
For the Year Ended |
|
||||||||||
|
December 31, 2022 |
|
|
January 1, 2022 |
|
|
December 31, 2022 |
|
|
January 1, 2022 |
|
||||
GAAP operating income |
$ |
20.7 |
|
|
$ |
31.9 |
|
|
$ |
137.3 |
|
|
$ |
149.3 |
|
Acquisition-related amortization of intangible assets |
|
7.5 |
|
|
|
7.5 |
|
|
|
28.1 |
|
|
|
32.8 |
|
Acquisition and financing-related expenses(1) |
|
1.9 |
|
|
|
2.8 |
|
|
|
5.9 |
|
|
|
5.7 |
|
Restructuring charges(2) |
|
1.4 |
|
|
|
- |
|
|
|
5.2 |
|
|
|
0.5 |
|
Officer transition costs |
|
- |
|
|
|
(0.3 |
) |
|
|
0.3 |
|
|
|
0.3 |
|
Inventory step-up amortization |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.6 |
|
Acquisition integration costs(3) |
|
1.3 |
|
|
|
1.1 |
|
|
|
3.7 |
|
|
|
2.9 |
|
Other |
|
- |
|
|
|
- |
|
|
|
0.2 |
|
|
|
(0.1 |
) |
Non-GAAP adjusted operating income |
$ |
32.8 |
|
|
$ |
43.1 |
|
|
$ |
180.7 |
|
|
$ |
192.0 |
|
GAAP operating margin |
|
10.6 |
% |
|
|
14.6 |
% |
|
|
15.5 |
% |
|
|
17.2 |
% |
Non-GAAP adjusted operating margin |
|
16.7 |
% |
|
|
19.8 |
% |
|
|
20.4 |
% |
|
|
22.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
For the Year Ended |
|
||||||||||
|
December 31, 2022 |
|
|
January 1, 2022 |
|
|
December 31, 2022 |
|
|
January 1, 2022 |
|
||||
Net income |
$ |
17.5 |
|
|
$ |
23.6 |
|
|
$ |
98.4 |
|
|
$ |
104.6 |
|
Interest expense, net |
|
5.0 |
|
|
|
3.9 |
|
|
|
16.7 |
|
|
|
16.9 |
|
Income tax (benefit) provision |
|
(0.4 |
) |
|
|
3.7 |
|
|
|
23.4 |
|
|
|
26.6 |
|
Depreciation and amortization |
|
14.2 |
|
|
|
13.3 |
|
|
|
51.6 |
|
|
|
54.4 |
|
EBITDA |
|
36.3 |
|
|
|
44.5 |
|
|
|
190.1 |
|
|
|
202.5 |
|
Acquisition and financing-related expenses(1) |
|
1.9 |
|
|
|
2.8 |
|
|
|
5.9 |
|
|
|
5.7 |
|
Restructuring charges(2) |
|
(0.3 |
) |
|
|
- |
|
|
|
3.5 |
|
|
|
0.5 |
|
Officer transition costs |
|
- |
|
|
|
(0.3 |
) |
|
|
0.3 |
|
|
|
0.3 |
|
Inventory step-up amortization |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.6 |
|
Acquisition integration costs(3) |
|
1.3 |
|
|
|
1.1 |
|
|
|
3.7 |
|
|
|
2.9 |
|
Change in fair value of contingent consideration |
|
0.1 |
|
|
|
1.1 |
|
|
|
1.7 |
|
|
|
1.1 |
|
Other |
|
(0.1 |
) |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.6 |
|
Adjusted EBITDA |
$ |
39.2 |
|
|
$ |
49.3 |
|
|
$ |
205.3 |
|
|
$ |
214.1 |
|
Adjusted EBITDA margin |
|
20.0 |
% |
|
|
22.7 |
% |
|
|
23.2 |
% |
|
|
24.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pre-acquisition adjusted EBITDA, 2022 Taimi and Daman, 2021 NEM and Joyonway |
|
|
|
|
|
|
|
5.0 |
|
|
|
6.3 |
|
||
TTM Pro forma adjusted EBITDA |
|
|
|
|
|
|
$ |
210.3 |
|
|
$ |
220.4 |
|
||
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 18 of 20
Free Cash Flow Quarterly Breakdown
(In millions)
(Unaudited)
|
Three Months Ended |
|||||||
|
January 1, |
|
|
December 31, |
|
|
||
|
2022 |
|
|
2022 |
|
|
||
Net cash provided by operating activities |
$ |
31.1 |
|
|
$ |
35.7 |
|
|
Capital expenditures |
|
(9.7 |
) |
|
|
(10.0 |
) |
|
Free cash flow |
$ |
21.4 |
|
|
$ |
25.7 |
|
|
HELIOS TECHNOLOGIES
Non-GAAP Cash Net Income RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
For the Year Ended |
|
||||||||||
|
December 31, 2022 |
|
|
January 1, 2022 |
|
|
December 31, 2022 |
|
|
January 1, 2022 |
|
||||
Net income |
$ |
17.5 |
|
|
$ |
23.6 |
|
|
$ |
98.4 |
|
|
$ |
104.6 |
|
Amortization of intangible assets |
|
7.7 |
|
|
|
7.6 |
|
|
|
28.7 |
|
|
|
33.0 |
|
Acquisition and financing-related expenses(1) |
|
1.9 |
|
|
|
2.8 |
|
|
|
5.9 |
|
|
|
5.7 |
|
Restructuring charges(2) |
|
(0.3 |
) |
|
|
- |
|
|
|
3.5 |
|
|
|
0.5 |
|
Officer transition costs |
|
- |
|
|
|
(0.3 |
) |
|
|
0.3 |
|
|
|
0.3 |
|
Inventory step-up amortization |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.6 |
|
Acquisition integration costs(3) |
|
1.3 |
|
|
|
1.1 |
|
|
|
3.7 |
|
|
|
2.9 |
|
Change in fair value of contingent consideration |
|
0.1 |
|
|
|
1.1 |
|
|
|
1.7 |
|
|
|
1.1 |
|
Other |
|
(0.1 |
) |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.6 |
|
Tax effect of above |
|
(2.7 |
) |
|
|
(3.1 |
) |
|
|
(11.0 |
) |
|
|
(11.2 |
) |
Non-GAAP cash net income |
$ |
25.4 |
|
|
$ |
32.9 |
|
|
$ |
131.3 |
|
|
$ |
138.1 |
|
Non-GAAP cash net income per diluted share |
$ |
0.78 |
|
|
$ |
1.01 |
|
|
$ |
4.03 |
|
|
$ |
4.25 |
|
(1) Acquisition and financing-related expenses include costs associated with our M&A activities. These activities include all phases of the M&A process from analyzing targets, to raising funding, to due diligence and transaction costs at closing. We utilize internal resources for a significant amount of time spent on our acquisition activities and have chosen not to staff a full M&A department or use significant outside services. We believe these costs are not representative of the Company's operational performance and it is therefore more meaningful to analyze results with the costs excluded. For the three months and year ended Dec 31, 2022, the charges include recurring labor costs of $0.4 million and $2.3 million, professional fees of $0.9 million and $2.0 million, travel costs of $0.2 million and $0.7 million and other M&A related costs of $0.4 million and $0.9 million, respectively.
(2) Restructuring activities include costs associated with our actions to improve operating efficiencies and rationalize our cost structure. The 2022 costs relate to an operational restructuring that combined the manufacturing operations at two of our locations into one location as well as organizational restructures among several locations, which aligned employee talent with the strategic operational goals of the company. For the three months and year ended Dec 31, 2022, the charges include recurring labor costs of $0.4 million and $2.2 million, severance-related costs of $0.6 million and $2.3 million and manufacturing relocation and other costs of $0.4 million and $0.7 million, respectively. Additionally, in the fourth quarter of 2022, we realized a gain on the sale of property, plant and equipment related to our restructuring activities totaling $1.8 million.
(3) Acquisition integration activities include costs associated with integrating our acquired businesses, which can occur up to 18 months after acquisition date. We believe these costs are not representative of the Company's operational performance and it is therefore more meaningful to analyze results with the costs excluded. For the three months and year ended Dec 31, 2022, the charges include recurring labor costs of $0.8 million and $2.5 million, professional fees of $0.2 million and $0.8 million and travel and other costs of $0.3 million and $0.4 million, respectively.
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 19 of 20
HELIOS TECHNOLOGIES
Non-GAAP Sales Growth RECONCILIATION
(In millions)
(Unaudited)
|
Three Months Ended |
|
|
For the Year Ended |
|
||||||||||||||||||
|
Hydraulics |
|
|
Electronics |
|
|
Consolidated |
|
|
Hydraulics |
|
|
Electronics |
|
|
Consolidated |
|
||||||
Q4 2022 Net Sales |
$ |
140.2 |
|
|
$ |
55.8 |
|
|
$ |
196.0 |
|
|
$ |
551.3 |
|
|
$ |
334.1 |
|
|
$ |
885.4 |
|
Impact of foreign currency translation(1) |
|
6.8 |
|
|
|
0.3 |
|
|
|
7.1 |
|
|
|
26.2 |
|
|
|
1.4 |
|
|
|
27.6 |
|
Net Sales in constant currency |
|
147.0 |
|
|
|
56.1 |
|
|
|
203.1 |
|
|
|
577.5 |
|
|
|
335.5 |
|
|
|
913.0 |
|
Less: Acquisition related sales |
|
(8.2 |
) |
|
|
- |
|
|
|
(8.2 |
) |
|
|
(22.4 |
) |
|
|
(2.5 |
) |
|
|
(24.9 |
) |
Organic sales in constant currency |
$ |
138.8 |
|
|
$ |
56.1 |
|
|
$ |
194.9 |
|
|
$ |
555.1 |
|
|
$ |
333.0 |
|
|
$ |
888.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Q4 2021 Net Sales |
$ |
130.9 |
|
|
$ |
86.8 |
|
|
$ |
217.7 |
|
|
$ |
516.4 |
|
|
$ |
352.7 |
|
|
$ |
869.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales growth |
|
7 |
% |
|
|
-36 |
% |
|
|
-10 |
% |
|
|
7 |
% |
|
|
-5 |
% |
|
|
2 |
% |
Net sales growth in constant currency |
|
12 |
% |
|
|
-35 |
% |
|
|
-7 |
% |
|
|
12 |
% |
|
|
-5 |
% |
|
|
5 |
% |
Organic net sales growth in constant currency |
|
6 |
% |
|
|
-35 |
% |
|
|
-10 |
% |
|
|
7 |
% |
|
|
-6 |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(1) The impact from foreign currency translation is calculated by translating current period activity at average prior period exchange rates. |
|
||||||||||||||||||||||
|
|
||||||||||||||||||||||
Helios Technologies’ Augmented Strategy Drives Top-Tier Margins and Solid Earnings for the Full Year 2022
February 27, 2023
Page 20 of 20
Net Debt-to-Adjusted EBITDA RECONCILIATION
(In millions)
(Unaudited)
|
|
As of |
|
|
|
|
December 31, 2022 |
|
|
Current portion of long-term non-revolving debt, net |
|
|
19.0 |
|
Revolving lines of credit |
|
|
262.9 |
|
Long-term non-revolving debt, net |
|
|
164.2 |
|
Total debt |
|
|
446.1 |
|
Less: Cash and cash equivalents |
|
|
43.7 |
|
Net debt |
|
|
402.4 |
|
|
|
|
|
|
TTM Pro forma adjusted EBITDA* |
|
|
210.3 |
|
Ratio of net debt to TTM pro forma adjusted EBITDA |
|
|
1.91 |
|
*On a pro-forma basis for Taimi and Daman |
|
|
|
|
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, cash net income per diluted share and sales in constant currency 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 2023 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.