10-Q 1 hlio-20220702.htm 10-Q 10-Q
Q230 April 2023Dec. 31, 20232024-10-312023-05-310001024795false2024-12-312023-05-3131 October 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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 July 2, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-21835

 

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. YesNo

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). YesNo

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 32,543,722 shares of common stock, par value $.001, outstanding as of July 29, 2022.

 


 

Helios Technologies, Inc.

INDEX

For the quarter ended

July 2, 2022

 

 

 

Page

 

 

 

PART I. FINANCIAL INFORMATION

 

3

 

 

 

 

 

Item 1.

Financial Statements

 

3

 

 

 

 

 

Consolidated Balance Sheets as of July 2, 2022 (unaudited) and January 1, 2022

 

3

 

 

 

 

 

Consolidated Statements of Operations for the Three Months Ended July 2, 2022 (unaudited) and July 3, 2021 (unaudited)

 

4

 

 

 

 

 

Consolidated Statements of Operations for the Six Months Ended July 2, 2022 (unaudited) and July 3, 2021 (unaudited)

 

5

 

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three and Six Months Ended July 2, 2022 (unaudited) and July 3, 2021 (unaudited)

 

6

 

 

 

 

 

Consolidated Statements of Shareholders’ Equity for the Three Months Ended July 2, 2022 (unaudited) and July 3, 2021 (unaudited)

 

7

 

 

 

 

 

Consolidated Statements of Shareholders’ Equity for the Six Months Ended July 2, 2022 (unaudited) and July 3, 2021 (unaudited)

 

8

 

 

 

 

 

Consolidated Statements of Cash Flows for the Six Months Ended July 2, 2022 (unaudited) and July 3, 2021 (unaudited)

 

9

 

 

 

 

 

Condensed Notes to the Consolidated, Unaudited Financial Statements

 

10

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

32

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

32

 

 

 

 

PART II. OTHER INFORMATION

 

33

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

33

 

 

 

 

 

 

Item 1A.

Risk Factors

 

33

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

33

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

33

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

33

 

 

 

 

 

 

Item 5.

Other Information

 

33

 

 

 

 

 

 

Item 6.

Exhibits

 

34

 

 

2


 

PART I: FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS.

Helios Technologies, Inc.

Consolidated Balance Sheets

(in thousands, except per share data)

 

 

July 2, 2022

 

 

January 1, 2022

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

41,315

 

 

$

28,540

 

Restricted cash

 

 

36

 

 

 

41

 

Accounts receivable, net of allowance for credit losses of $1,049 and $1,212

 

 

149,883

 

 

 

134,561

 

Inventories, net

 

 

178,878

 

 

 

165,629

 

Income taxes receivable

 

 

2,685

 

 

 

2,762

 

Other current assets

 

 

17,481

 

 

 

20,101

 

Total current assets

 

 

390,278

 

 

 

351,634

 

Property, plant and equipment, net

 

 

168,860

 

 

 

174,210

 

Deferred income taxes

 

 

8,887

 

 

 

2,934

 

Goodwill

 

 

437,280

 

 

 

459,936

 

Other intangible assets, net

 

 

380,878

 

 

 

412,759

 

Other assets

 

 

19,481

 

 

 

13,873

 

Total assets

 

$

1,405,664

 

 

$

1,415,346

 

Liabilities and shareholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

76,530

 

 

$

85,301

 

Accrued compensation and benefits

 

 

20,473

 

 

 

28,595

 

Other accrued expenses and current liabilities

 

 

35,099

 

 

 

28,254

 

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

 

 

19,157

 

 

 

18,125

 

Dividends payable

 

 

2,925

 

 

 

2,917

 

Income taxes payable

 

 

8,631

 

 

 

6,328

 

Total current liabilities

 

 

162,815

 

 

 

169,520

 

Revolving line of credit

 

 

223,827

 

 

 

242,312

 

Long-term non-revolving debt, net

 

 

173,807

 

 

 

183,897

 

Deferred income taxes

 

 

66,912

 

 

 

71,836

 

Other noncurrent liabilities

 

 

31,279

 

 

 

38,818

 

Total liabilities

 

 

658,640

 

 

 

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,
   
32,504 and 32,407 shares issued and outstanding

 

 

33

 

 

 

32

 

Capital in excess of par value

 

 

397,643

 

 

 

394,641

 

Retained earnings

 

 

417,944

 

 

 

363,279

 

Accumulated other comprehensive loss

 

 

(68,596

)

 

 

(48,989

)

Total shareholders' equity

 

 

747,024

 

 

 

708,963

 

Total liabilities and shareholders' equity

 

$

1,405,664

 

 

$

1,415,346

 

 

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

3


 

Helios Technologies, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

July 2, 2022

 

 

July 3, 2021

 

 

 

(unaudited)

 

 

(unaudited)

 

Net sales

 

$

241,668

 

 

$

223,413

 

Cost of sales

 

 

159,358

 

 

 

141,261

 

Gross profit

 

 

82,310

 

 

 

82,152

 

Selling, engineering and administrative expenses

 

 

32,534

 

 

 

32,410

 

Amortization of intangible assets

 

 

6,799

 

 

 

7,680

 

Operating income

 

 

42,977

 

 

 

42,062

 

Interest expense, net

 

 

3,813

 

 

 

4,400

 

Foreign currency transaction (gain) loss, net

 

 

(173

)

 

 

503

 

Other non-operating expense (income), net

 

 

581

 

 

 

(110

)

Income before income taxes

 

 

38,756

 

 

 

37,269

 

Income tax provision

 

 

8,720

 

 

 

6,575

 

Net income

 

$

30,036

 

 

$

30,694

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

Basic

 

$

0.92

 

 

$

0.95

 

Diluted

 

$

0.92

 

 

$

0.95

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

32,497

 

 

 

32,237

 

Diluted

 

 

32,541

 

 

 

32,362

 

 

 

 

 

 

 

 

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.

 

 

4


 

Helios Technologies, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

 

 

 

Six Months Ended

 

 

 

July 2, 2022

 

 

July 3, 2021

 

 

 

(unaudited)

 

 

(unaudited)

 

Net sales

 

$

482,215

 

 

$

428,258

 

Cost of sales

 

 

316,262

 

 

 

270,738

 

Gross profit

 

 

165,953

 

 

 

157,520

 

Selling, engineering and administrative expenses

 

 

66,310

 

 

 

62,971

 

Amortization of intangible assets

 

 

13,780

 

 

 

17,878

 

Operating income

 

 

85,863

 

 

 

76,671

 

Interest expense, net

 

 

7,621

 

 

 

9,151

 

Foreign currency transaction (gain) loss, net

 

 

(1,097

)

 

 

967

 

Other non-operating expense (income), net

 

 

1,331

 

 

 

(111

)

Income before income taxes

 

 

78,008

 

 

 

66,664

 

Income tax provision

 

 

17,494

 

 

 

13,382

 

Net income

 

$

60,514

 

 

$

53,282

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

Basic

 

$

1.86

 

 

$

1.65

 

Diluted

 

$

1.86

 

 

$

1.65

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

 

32,468

 

 

 

32,215

 

Diluted

 

 

32,566

 

 

 

32,370

 

 

 

 

 

 

 

 

Dividends declared per share

 

$

0.18

 

 

$

0.18

 

 

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

 

5


 

Helios Technologies, Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

July 2, 2022

 

 

July 3, 2021

 

 

July 2, 2022

 

 

July 3, 2021

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Net income

 

$

30,036

 

 

$

30,694

 

 

$

60,514

 

 

$

53,282

 

Other comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax

 

 

(19,137

)

 

 

2,431

 

 

 

(26,872

)

 

 

(6,687

)

Unrealized gain on interest rate swap, net of tax

 

 

1,641

 

 

 

537

 

 

 

7,265

 

 

 

2,242

 

Total other comprehensive (loss) income

 

 

(17,496

)

 

 

2,968

 

 

 

(19,607

)

 

 

(4,445

)

Comprehensive income

 

$

12,540

 

 

$

33,662

 

 

$

40,907

 

 

$

48,837

 

 

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

 

6


 

Helios Technologies, Inc.

Consolidated Statements of Shareholders’ Equity (unaudited)

Three Months Ended

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

other

 

 

 

 

 

 

Preferred

 

 

Preferred

 

 

Common

 

 

Common

 

 

excess of

 

 

Retained

 

 

comprehensive

 

 

 

 

 

 

shares

 

 

stock

 

 

shares

 

 

stock

 

 

par value

 

 

earnings

 

 

loss

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 2, 2022

 

 

 

 

$

 

 

 

32,478

 

 

$

32

 

 

$

395,873

 

 

$

390,831

 

 

$

(51,100

)

 

$

735,636

 

Shares issued, restricted stock

 

 

 

 

 

 

 

 

19

 

 

 

1

 

 

 

41

 

 

 

 

 

 

 

 

 

42

 

Shares issued, ESPP

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

530

 

 

 

 

 

 

 

 

 

530

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,878

 

 

 

 

 

 

 

 

 

1,878

 

Cancellation of shares for payment of employee tax withholding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(679

)

 

 

 

 

 

 

 

 

(679

)

Dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,923

)

 

 

 

 

 

(2,923

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,036

 

 

 

 

 

 

30,036

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,496

)

 

 

(17,496

)

Balance at July 2, 2022

 

 

 

 

$

 

 

 

32,504

 

 

$

33

 

 

$

397,643

 

 

$

417,944

 

 

$

(68,596

)

 

$

747,024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at April 3, 2021

 

 

 

 

$

 

 

 

32,226

 

 

$

32

 

 

$

376,994

 

 

$

290,007

 

 

$

(41,753

)

 

$

625,280

 

Shares issued, restricted stock

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

18

 

Shares issued, other compensation

 

 

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued, ESPP

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

463

 

 

 

 

 

 

 

 

 

463

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,076

 

 

 

 

 

 

 

 

 

2,076

 

Cancellation of shares for payment of employee tax withholding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(252

)

 

 

 

 

 

 

 

 

(252

)

Dividends declared

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,902

)

 

 

 

 

 

(2,902

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30,694

 

 

 

 

 

 

30,694

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,968

 

 

 

2,968

 

Balance at July 3, 2021

 

 

 

 

$

 

 

 

32,249

 

 

$

32

 

 

$

379,299

 

 

$

317,799

 

 

$

(38,785

)

 

$

658,345

 

 

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

 

 

7


 

Helios Technologies, Inc.

Consolidated Statements of Shareholders’ Equity (unaudited)

Six Months Ended

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital in

 

 

 

 

 

other

 

 

 

 

 

 

Preferred

 

 

Preferred

 

 

Common

 

 

Common

 

 

excess of

 

 

Retained</