Exhibit 99.1

NEWS

RELEASE

 

FOR IMMEDIATE RELEASE

Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting
Strong Market Leadership; Augmented Strategy Gaining Traction

 

End markets outperform expectations as record levels of demand are realized in agriculture, marine and health & wellness

 

Diversification strategy bearing fruit with additional customer wins in new markets

 

Capacity expansion efforts and productivity enhancements driving our ability to meet demand and deliver record margins

 

Net income was $22.6 million with operating margin of 16.9% and Adjusted EBITDA1 margin of 25.1% expanding 160 basis points over prior-year period

 

Diluted EPS of $0.70 up $1.24 from last year; Non-GAAP Cash EPS of $0.99 up $0.43, or 77%

 

Quickly de-levering balance sheet– reduced net debt to adjusted EBITDA leverage ratio to 2.65x2

 

Raising revenue outlook for 2021; margins hold strong against supply chain headwinds

SARASOTA, FL, May 10, 2021 — Helios Technologies, Inc. (NasdaqHLIO) (“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 3, 2021. Results include a full quarter of BWG Holdings I Corp. (known as “Balboa Water Group” or “Balboa acquisition”), which was acquired on November 6, 2020.

Josef Matosevic, the Company’s President and Chief Executive Officer, commented, “Our first quarter well exceeded our expectations. Our performance was a direct result of the plans we put into place in the second half of last year and the excellent execution by the Helios team against those plans.  In addition, end markets that we had projected would be strong, were even stronger than expected. We had very robust demand across many markets, with record levels in our Electronics segment as well as for our quick release couplings in our Hydraulics segment. We believe our leading market position, best in class lead times, and top-tier technologies are driving market share gains. Importantly, we were able to expand capacity and increase productivity to capture that demand. We believe our diversification strategy is also delivering, as we continue to add new customers in new markets.

While there are headwinds from increasing material costs, supply chain constraints and higher freight expenses, we are holding our margins level for the year as we carefully manage pricing to strengthen our advantages in the market and gain share.”

He concluded, “We are executing well on our augmented value streams so we can meet demand, diversify our markets and drive operating improvements. Our recent flywheel acquisition of Shenzhen Joyonway Electronics & Technology Company in China demonstrates our intent to expand our capacity and build our ‘in the region for the region’ capabilities. We continue to build our engineering expertise and expand our technology and product offerings. Additionally, we have structured our business to leverage across the organization to enable growth and drive profitability.”

 

1 

Adjusted EBITDA is a non-GAAP measure. See comments regarding forward-looking non-GAAP measures in the Forward-Looking Information statement of this release

2 

On a pro-forma basis for Balboa Water Group

Helios Technologies | 1500 West University Parkway | Sarasota, FL 34243 | 941-362-1200


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 2 of 13

 

First Quarter 2021 Consolidated Results

($ in millions, except per share data)

Q1 2021

 

 

Q1 2020

 

 

Change

 

 

% Change

 

Net sales

$

204.8

 

 

$

129.5

 

 

$

75.3

 

 

 

58

%

Gross profit

$

75.4

 

 

$

51.9

 

 

$

23.5

 

 

 

45

%

Gross margin

 

36.8

%

 

 

40.1

%

 

 

(330

)

bps

 

 

 

Operating income (loss)

$

34.6

 

 

$

(10.0

)

 

$

44.6

 

 

NM

 

Operating margin

 

16.9

%

 

 

-7.7

%

 

 

2460

 

bps

 

 

 

Non-GAAP adjusted operating margin

 

22.8

%

 

 

20.4

%

 

 

240

 

bps

 

 

 

Net income (loss)

$

22.6

 

 

$

(17.2

)

 

$

39.8

 

 

NM

 

Diluted EPS

$

0.70

 

 

$

(0.54

)

 

$

1.24

 

 

NM

 

Non-GAAP cash net income

$

31.7

 

 

$

18.1

 

 

$

13.6

 

 

 

75

%

Non-GAAP cash EPS

$

0.99

 

 

$

0.56

 

 

$

0.43

 

 

 

77

%

Adjusted EBITDA

$

51.3

 

 

$

30.4

 

 

$

20.9

 

 

 

69

%

Adjusted EBITDA margin

 

25.1

%

 

 

23.5

%

 

 

160

 

bps

 

 

 

NM = Not Meaningful

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 certain non-recurring charges) 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 all markets, in particular agriculture, construction equipment, recreation, and health & wellness.  Results include a full quarter contribution from the Balboa acquisition.

 

Strength in demand across all regions.

 

Foreign currency translation adjustment on sales: $5.8 million favorable.

Profits and margins

 

Gross profit and margin drivers: Gross profit and margin were influenced by mix of products sold, the business model of the Balboa acquisition, which has lower gross margin but higher operating margin, as well as the increasing freight costs and constraints with the supply chain.

 

Selling, engineering and administrative (“SEA”) expenses: as a percentage of sales, improved 490 basis points to 14.9%, reflecting both the business model of the Balboa acquisition and continued cost containment initiatives.

 

Amortization of intangible assets: $10.2 million was up from $4.3 million in the prior year reflecting the acquisition.

 

Goodwill impairment charge: $31.9 million in first quarter of 2020, resulting from weakened market outlook primarily due to the COVID-19 pandemic.

Non-operating items

 

Net interest expense: $4.8 million in the quarter, up $1.8 million compared with the prior-year period due to higher debt balances.

 

Effective tax rate: 23.2% compared with 22.3% in the prior-year period, which excludes non-taxable goodwill impairment charge.

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 3 of 13

 

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

 

GAAP net income and earnings per share: $22.6 million and $0.70 per share.

 

Non-GAAP cash earnings per share: $0.99 compared with $0.56 last year on strong demand, operational efficiencies and better-than-expected performance of the Balboa acquisition.

 

Adjusted EBITDA margin: Improved 160 basis points to 25.1% compared with the prior-year period due higher volume and operational efficiencies.

Hydraulics Segment Review

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

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

Three Months Ended

 

 

 

 

 

 

 

 

 

 

 

Q1 2021

 

 

Q1 2020

 

 

Change

 

 

% Change

 

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

34.3

 

 

$

37.3

 

 

$

(3.0

)

 

 

(8

%)

 

EMEA

 

43.3

 

 

 

33.5

 

 

 

9.8

 

 

 

29

%

 

APAC

 

41.5

 

 

 

33.0

 

 

 

8.5

 

 

 

26

%

 

Total Segment Sales

$

119.1

 

 

$

103.8

 

 

$

15.3

 

 

 

15

%

 

Gross Profit

$

45.4

 

 

$

39.7

 

 

$

5.7

 

 

 

14

%

 

Gross Margin

 

38.1

%

 

 

38.2

%

 

 

(10

)

bps

 

 

 

 

SEA Expenses

$

17.3

 

 

$

18.2

 

 

$

(0.9

)

 

 

(5

%)

 

Operating Income

$

28.1

 

 

$

21.5

 

 

$

6.6

 

 

 

31

%

 

Operating Margin

 

23.6

%

 

 

20.7

%

 

 

290

 

bps

 

 

 

 

 

First Quarter Hydraulics Segment Review

 

Higher sales in the European, Middle East, Africa (“EMEA”) and Asia/Pacific (“APAC”) regions, were driven by demand from the construction and agricultural end markets. This more than offset softness in the Americas; foreign currency exchange rates had a $5.7 million favorable adjustment on sales.

 

The change in gross margin was mostly the result of product mix and increases in freight to meet customer requirements in a timely manner.

 

Operating margin improved 290 basis points reflecting strong cost containment efforts.

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 4 of 13

 

Electronics Segment Review  

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

($ in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Electronics

Three Months Ended

 

 

 

 

 

 

 

 

 

 

Q1 2021

 

 

Q1 2020

 

 

Change

 

 

% Change

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

$

65.0

 

 

$

21.6

 

 

$

43.4

 

 

 

201

%

EMEA

 

9.3

 

 

 

2.5

 

 

 

6.8

 

 

 

272

%

APAC

 

11.4

 

 

 

1.6

 

 

 

9.8

 

 

 

613

%

Total Segment Sales

$

85.7

 

 

$

25.7

 

 

$

60.0

 

 

 

234

%

Gross Profit

$

30.0

 

 

$

12.2

 

 

$

17.8

 

 

 

146

%

Gross Margin

 

35.0

%

 

 

47.5

%

 

 

(1250

)

bps

 

 

 

SEA Expenses

$

11.7

 

 

$

7.4

 

 

$

4.3

 

 

 

58

%

Operating Income

$

18.3

 

 

$

4.8

 

 

$

13.5

 

 

 

281

%

Operating Margin

 

21.4

%

 

 

18.7

%

 

 

270

 

bps

 

 

 

 

First Quarter Electronics Segment Review

 

Sales increased mostly as a result of the Balboa acquisition.  This was the first full quarter of revenue contribution from Balboa. Strong demand from health & wellness and recreational markets as well as new product introductions drove significant sales increases despite headwinds from supply chain constraints to meet demand.

 

Gross margin reflects the different business model of the Balboa acquisition, which has lower gross margins that are offset by a lower SEA expense structure.  

 

Operating margin of 21.4%, up 270 basis points compared with the prior-year period, demonstrates the business model of the Balboa acquisition, which has an inherently lower operating expense structure, and higher volume in the organic business. SEA expenses increased due to the incremental expenses from the acquisition.

Balance Sheet and Cash Flow Review

 

Total debt was reduced by $10.2 million to $452.2 million during the first quarter of 2021 from
$462.4 million at January 2, 2021, reflecting net repayment of $5.9 million in the quarter.

 

Cash and cash equivalents at April 3, 2021 were $25.9 million, up $0.7 million from the end of 2020.  

 

Pro-forma net debt-to-adjusted EBITDA improved to 2.65x at the end of the first quarter 2021 compared with 3.0x (pro-forma for Balboa) at the end of 2020 demonstrating the Company’s ability to rapidly de-lever the balance sheet following an acquisition. At the end of the first quarter 2021, the Company had $150.1 million available on its revolving lines of credit.

 

Net cash provided by operations remained flat at $15.1 million in the first quarter 2021 and in the prior-year period.  

 

Capital expenditures were $5.0 million, or approximately 2% of sales. The Company continues to expect to spend between $30 to $35 million in capital investments in 2021.

 

Paid 98th sequential quarterly cash dividend on April 20, 2021.


 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 5 of 13

 

2021 Outlook

The following provides the Company’s expectations for 2021. This assumes constant currency, using quarter end rates, and that markets served continue to recover from the global pandemic.

 

Previous 2021

Guidance

Updated 2021

Guidance

% Change at

Mid-Point from Previous Guidance

 

Consolidated revenue

$675 - $705 million

$740 - $750 million

8%

 

Adjusted EBITDA

$155 - $170 million

$170 - $180 million

8%

 

Adjusted EBITDA margin

23% - 24%

23% - 24%

unchanged

 

Interest expense

$16 - $18 million

$16 - $18 million

unchanged

 

Effective tax rate

24% - 26%

24% - 26%

unchanged

 

Depreciation

$22 - $24 million

$22 - $24 million

unchanged

 

Amortization

$30 - $31 million

$30 - $31 million

unchanged

 

Capital expenditures

$30 - $35 million

$30 - $35 million

unchanged

 

Capital expenditures % total revenue

~5% of sales

~4% of sales

updated calculation

 

Non-GAAP Cash EPS

$2.75 - $3.10

$3.30 - $3.50

16%

 

Tricia Fulton, the Company’s Chief Financial Officer commented, “The increase in our guidance for 2021 is driven by the strong end market demand we had in the first quarter and expect to continue throughout 2021. We are able to leverage our fixed cost base and maintain our strong margins even given the headwinds on material costs and logistics and our decision to manage price to our competitive advantage.”

Webcast

The Company will host a conference call and webcast tomorrow, May 11, 2021 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 18, 2021.  To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13718360.  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, health and wellness. Helios sells its products to customers in over 85 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

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 6 of 13

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) conditions in the capital markets, including the interest rate environment and the availability of capital; (ii) our failure to realize the benefits expected from the Balboa acquisition, our failure to promptly and effectively integrate the Balboa acquisition and the ability of Helios to retain and hire key personnel, and maintain relationships with suppliers (iii) risks related to health epidemics, pandemics and similar outbreaks and similar outbreaks, including, without limitation, the current COVID-19 pandemic, which may affect our supply chain and material costs, which could have material adverse effects on our business, financial position, results of operations and/or cash flows; (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; and (v) 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 2, 2021.

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 margin. 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 2021 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 Communications

(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 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 7 of 13

HELIOS TECHNOLOGIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

 

 

 

April 3,

 

 

March 28,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

$

204,844

 

 

$

129,483

 

 

 

58

%

 

Cost of sales

 

129,477

 

 

 

77,633

 

 

 

67

%

 

Gross profit

 

75,367

 

 

 

51,850

 

 

 

45

%

 

Gross margin

 

36.8

%

 

 

40.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, engineering and administrative expenses

 

30,561

 

 

 

25,664

 

 

 

19

%

 

Amortization of intangible assets

 

10,198

 

 

 

4,348

 

 

 

135

%

 

Goodwill impairment

 

-

 

 

 

31,871

 

 

NM

 

 

Operating income (loss)

 

34,608

 

 

 

(10,033

)

 

NM

 

 

Operating margin

 

16.9

%

 

 

-7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

4,751

 

 

 

2,951

 

 

 

61

%

 

Foreign currency transaction loss, net

 

464

 

 

 

125

 

 

 

271

%

 

Other non-operating income, net

 

(1

)

 

 

(94

)

 

 

(99

)%

 

Income (loss) before income taxes

 

29,394

 

 

 

(13,015

)

 

NM

 

 

Income tax provision

 

6,807

 

 

 

4,208

 

 

 

62

%

 

Net income (loss)

$

22,587

 

 

$

(17,223

)

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net income (loss) per common share

$

0.70

 

 

$

(0.54

)

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted weighted average shares outstanding

 

32,193

 

 

 

32,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per share

$

0.09

 

 

$

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM = Not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 8 of 13

 

HELIOS TECHNOLOGIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

 

April 3,

 

 

January 2,

 

 

2021

 

 

2021

 

Assets

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

25,924

 

 

$

25,216

 

Restricted cash

 

41

 

 

 

41

 

Accounts receivable, net of allowance for credit losses

 

 

 

 

 

 

 

of $1,453 and $1,493

 

124,391

 

 

 

97,623

 

Inventories, net

 

119,763

 

 

 

110,372

 

Income taxes receivable

 

579

 

 

 

1,103

 

Other current assets

 

21,901

 

 

 

19,664

 

Total current assets

 

292,599

 

 

 

254,019

 

Property, plant and equipment, net

 

160,695

 

 

 

163,177

 

Deferred income taxes

 

6,152

 

 

 

6,645

 

Goodwill

 

434,059

 

 

 

443,533

 

Other intangible assets, net

 

407,309

 

 

 

419,375

 

Other assets

 

10,734

 

 

 

10,230

 

Total assets

$

1,311,548

 

 

$

1,296,979

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

72,608

 

 

$

59,477

 

Accrued compensation and benefits

 

18,731

 

 

 

22,985

 

Other accrued expenses and current liabilities

 

24,315

 

 

 

24,941

 

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

 

15,841

 

 

 

16,229

 

Dividends payable

 

2,900

 

 

 

2,891

 

Income taxes payable

 

7,749

 

 

 

1,489

 

Total current liabilities

 

142,144

 

 

 

128,012

 

Revolving line of credit

 

249,797

 

 

 

255,909

 

Long-term non-revolving debt, net

 

186,126

 

 

 

189,932

 

Deferred income taxes

 

73,578

 

 

 

78,864

 

Other noncurrent liabilities

 

34,623

 

 

 

36,472

 

Total liabilities

 

686,268

 

 

 

689,189

 

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,

 

 

 

 

 

 

 

32,226 and 32,121 shares issued and outstanding

 

32

 

 

 

32

 

Capital in excess of par value

 

376,994

 

 

 

371,778

 

Retained earnings

 

290,007

 

 

 

270,320

 

Accumulated other comprehensive loss

 

(41,753

)

 

 

(34,340

)

Total shareholders’ equity

 

625,280

 

 

 

607,790

 

Total liabilities and shareholders’ equity

$

1,311,548

 

 

$

1,296,979

 

 

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 9 of 13

 

HELIOS TECHNOLOGIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

April 3,

 

 

March 28,

 

 

 

2021

 

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income (loss)

$

22,587

 

 

$

(17,223

)

Adjustments to reconcile net income (loss) to

 

 

 

 

 

 

 

net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

15,237

 

 

 

8,376

 

Goodwill Impairment

 

-

 

 

 

31,871

 

Stock-based compensation expense

 

2,107

 

 

 

1,533

 

Amortization of debt issuance costs

 

125

 

 

 

179

 

Benefit for deferred income taxes

 

(906

)

 

 

(1,186

)

Forward contract gains, net

 

(2,402

)

 

 

(440

)

Other, net

 

32

 

 

 

160

 

(Increase) decrease in operating assets:

 

 

 

 

 

 

 

Accounts receivable

 

(28,051

)

 

 

(6,838

)

Inventories

 

(10,809

)

 

 

(2,818

)

Income taxes receivable

 

565

 

 

 

1,415

 

Other current assets

 

(2,614

)

 

 

(2,740

)

Other assets

 

2,139

 

 

 

1,213

 

Increase (decrease) in operating liabilities:

 

 

 

 

 

 

 

Accounts payable

 

13,912

 

 

 

3,867

 

Accrued expenses and other liabilities

 

(2,147

)

 

 

(4,652

)

Income taxes payable

 

6,126

 

 

 

3,051

 

Other noncurrent liabilities

 

(819

)

 

 

(701

)

Net cash provided by operating activities

 

15,082

 

 

 

15,067

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Acquisition of business, net of cash acquired

 

(1,000

)

 

 

-

 

Amounts paid for net assets acquired

 

(2,400

)

 

 

-

 

Capital expenditures

 

(5,036

)

 

 

(2,937

)

Proceeds from dispositions of equipment

 

35

 

 

 

3

 

Cash settlement of forward contracts

 

1,544

 

 

 

1,634

 

Software development costs

 

(623

)

 

 

-

 

Net cash used in investing activities

 

(7,480

)

 

 

(1,300

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Borrowings on revolving credit facilities

 

6,602

 

 

 

2,000

 

Repayment of borrowings on revolving credit facilities

 

(8,500

)

 

 

(5,500

)

Repayment of borrowings on long-term non-revolving debt

 

(4,029

)

 

 

(2,100

)

Proceeds from stock issued

 

333

 

 

 

355

 

Dividends to shareholders

 

(2,891

)

 

 

(2,885

)

Other financing activities

 

(974

)

 

 

(815

)

Net cash used in financing activities

 

(9,459

)

 

 

(8,945

)

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

 

2,565

 

 

 

310

 

Net increase in cash, cash equivalents and restricted cash

 

708

 

 

 

5,132

 

Cash, cash equivalents and restricted cash, beginning of period

 

25,257

 

 

 

22,162

 

Cash, cash equivalents and restricted cash, end of period

$

25,965

 

 

$

27,294

 

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 10 of 13

 

HELIOS TECHNOLOGIES

SEGMENT DATA

(In thousands)

(Unaudited)

 

(Unaudited)

Three Months Ended

 

 

($ in thousands)

April 3,

 

 

March 28,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

Sales:

 

 

 

 

 

 

 

 

Hydraulics

$

119,106

 

 

$

103,818

 

 

Electronics

 

85,738

 

 

 

25,665

 

 

Consolidated

$

204,844

 

 

$

129,483

 

 

 

 

 

 

 

 

 

 

 

Gross profit and margin:

 

 

 

 

 

 

 

 

Hydraulics

$

45,409

 

 

$

39,674

 

 

 

 

38.1

%

 

 

38.2

%

 

Electronics

 

29,958

 

 

 

12,176

 

 

 

 

35.0

%

 

 

47.5

%

 

Consolidated

$

75,367

 

 

$

51,850

 

 

 

 

36.8

%

 

 

40.1

%

 

 

 

 

 

 

 

 

 

 

Operating income (loss) and margin:

 

 

 

 

 

 

 

 

Hydraulics

$

28,073

 

 

$

21,482

 

 

 

 

23.6

%

 

 

20.7

%

 

Electronics

 

18,280

 

 

 

4,778

 

 

 

 

21.4

%

 

 

18.7

%

 

Corporate and other

 

(11,745

)

 

 

(36,293

)

 

Consolidated

$

34,608

 

 

$

(10,033

)

 

 

 

16.9

%

 

 

(7.7

%)

 

 

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 11 of 13

 

HELIOS TECHNOLOGIES

ADDITIONAL INFORMATION

(Unaudited)

2021 Sales by Geographic Region and Segment

 

($ in millions)

 

 

 

 

 

 

 

Q1

 

% Change y/y

 

Americas:

 

 

 

 

 

 

Hydraulics

$

34.3

 

(8%)

 

Electronics

 

65.0

 

201%

 

Consol. Americas

 

99.3

 

69%

 

% of total

 

48

%

 

 

 

EMEA:

 

 

 

 

 

 

Hydraulics

$

43.3

 

29%

 

Electronics

 

9.3

 

272%

 

Consol. EMEA

 

52.6

 

46%

 

% of total

 

26

%

 

 

 

APAC:

 

 

 

 

 

 

Hydraulics

$

41.5

 

26%

 

Electronics

 

11.4

 

613%

 

Consol. APAC

 

52.9

 

53%

 

% of total

 

26

%

 

 

 

Total

$

204.8

 

58%

 

 

2020 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 2020

 

% Change y/y

 

Americas:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

37.3

 

(10%)

 

$

34.2

 

(17%)

 

$

27.7

 

(36%)

 

$

31.3

 

(14%)

 

$

130.5

 

(20%)

 

Electronics

 

21.6

 

(17%)

 

 

13.4

 

(50%)

 

 

21.4

 

(11%)

 

 

37.5

 

92%

 

 

93.9

 

(2%)

 

Consol. Americas

 

58.9

 

(13%)

 

 

47.6

 

(30%)

 

 

49.1

 

(27%)

 

 

68.8

 

24%

 

 

224.4

 

(13%)

 

% of total

 

45

%

 

 

 

 

40

%

 

 

 

 

40

%

 

 

 

 

45

%

 

 

 

 

43

%

 

 

 

EMEA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

 

33.5

 

(20%)

 

 

31.2

 

(15%)

 

 

32.1

 

1%

 

 

34.4

 

11%

 

 

131.2

 

(7%)

 

Electronics

 

2.5

 

0%

 

 

1.9

 

6%

 

 

1.5

 

(29%)

 

 

4.9

 

145%

 

 

10.8

 

29%

 

Consol. EMEA

 

36.0

 

(19%)

 

 

33.1

 

(14%)

 

 

33.6

 

(1%)

 

 

39.3

 

19%

 

 

142.0

 

(5%)

 

% of total

 

28

%

 

 

 

 

28

%

 

 

 

 

27

%

 

 

 

 

26

%

 

 

 

 

27

%

 

 

 

APAC:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hydraulics

$

33.0

 

(0%)

 

$

36.7

 

3%

 

$

38.4

 

10%

 

$

37.4

 

6%

 

$

145.5

 

5%

 

Electronics

 

1.6

 

(11%)

 

 

1.9

 

12%

 

 

1.5

 

(17%)

 

 

6.1

 

221%

 

 

11.1

 

54%

 

Consol. APAC

 

34.6

 

(1%)

 

 

38.6

 

3%

 

 

39.9

 

9%

 

 

43.5

 

17%

 

 

156.6

 

7%

 

% of total

 

27

%

 

 

 

 

32

%

 

 

 

 

33

%

 

 

 

 

29

%

 

 

 

 

30

%

 

 

 

Total

$

129.5

 

(12%)

 

$

119.3

 

(17%)

 

$

122.6

 

(11%)

 

$

151.6

 

20%

 

$

523.0

 

(6%)

 

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 12 of 13

 

HELIOS TECHNOLOGIES

Non-GAAP Adjusted Operating Income RECONCILIATION

(In thousands)

(Unaudited)

 

 

Three Months Ended

 

 

 

April 3,

 

 

March 28,

 

 

 

2021

 

 

2020

 

 

GAAP operating income (loss)

$

34,608

 

 

$

(10,033

)

 

Acquisition-related amortization of intangible assets

 

10,198

 

 

 

4,348

 

 

Acquisition and financing-related expenses

 

922

 

 

 

74

 

 

Restructuring charges

 

418

 

 

 

-

 

 

CEO and officer transition costs

 

-

 

 

 

165

 

 

Goodwill impairment

 

-

 

 

 

31,871

 

 

Acquisition integration costs

 

594

 

 

 

-

 

 

Non-GAAP adjusted operating income

$

46,740

 

 

$

26,425

 

 

GAAP operating margin

 

16.9

%

 

 

-7.7

%

 

Non-GAAP adjusted operating margin

 

22.8

%

 

 

20.4

%

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA RECONCILIATION

(in thousands)

(Unaudited)

 

Three Months Ended

 

 

 

Twelve Months Ended

 

 

April 3,

 

 

March 28,

 

 

 

April 3,

 

 

2021

 

 

2020

 

 

 

2021

 

Net income (loss)

$

22,587

 

 

$

(17,223

)

 

 

$

54,028

 

Interest expense, net

 

4,751

 

 

 

2,951

 

 

 

 

15,086

 

Income tax provision

 

6,807

 

 

 

4,208

 

 

 

 

12,428

 

Depreciation and amortization

 

15,237

 

 

 

8,376

 

 

 

 

46,556

 

EBITDA

 

49,382

 

 

 

(1,688

)

 

 

 

128,098

 

Acquisition and financing-related expenses

 

922

 

 

 

74

 

 

 

 

8,111

 

Restructuring charges

 

418

 

 

 

-

 

 

 

 

780

 

CEO and officer transition costs

 

-

 

 

 

165

 

 

 

 

2,427

 

Goodwill impairment

 

-

 

 

 

31,871

 

 

 

 

-

 

Inventory step-up amortization

 

-

 

 

 

-

 

 

 

 

1,874

 

Acquisition integration costs

 

594

 

 

 

-

 

 

 

 

851

 

Change in fair value of contingent consideration

 

-

 

 

 

-

 

 

 

 

(47

)

Adjusted EBITDA

$

51,316

 

 

$

30,422

 

 

 

$

142,094

 

Adjusted EBITDA margin

 

25.1

%

 

 

23.5

%

 

 

 

23.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Balboa Water Group pre-acquisition adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

18,514

 

TTM Pro forma adjusted EBITDA

 

 

 

 

 

 

 

 

 

$

160,608

 

 


Helios Technologies First Quarter 2021 Revenue Grew 58% Reflecting Strong Leadership;

Augmented Strategy Gaining Traction

May 10, 2021

Page 13 of 13

 

HELIOS TECHNOLOGIES

Non-GAAP Cash Net Income RECONCILIATION

(In thousands)

(Unaudited)

 

Three Months Ended

 

 

 

 

April 3,

 

 

March 28,

 

 

 

 

2021

 

 

2020

 

 

 

Net income (loss)

$

22,587

 

 

$

(17,223

)

 

 

Amortization of intangible assets

 

10,231

 

 

 

4,348

 

 

 

Acquisition and financing-related expenses

 

922

 

 

 

74

 

 

 

Restructuring charges

 

418

 

 

 

-

 

 

 

CEO and officer transition costs

 

-

 

 

 

165

 

 

 

Goodwill impairment

 

-

 

 

 

31,871

 

 

 

Acquisition integration costs

 

594

 

 

 

-

 

 

 

Tax effect of above

 

(3,041

)

 

 

(1,147

)

 

 

Non-GAAP cash net income

$

31,711

 

 

$

18,088

 

 

 

Non-GAAP cash net income per diluted share

$

0.99

 

 

$

0.56

 

 

 

Net Debt-to-Adjusted EBITDA RECONCILIATION

(In thousands)

(Unaudited)

 

 

As of

 

 

 

April 3,

 

 

 

2021

 

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

 

$

15,841

 

Revolving lines of credit

 

 

250,212

 

Long-term non-revolving debt, net

 

 

186,126

 

Total debt

 

 

452,179

 

Less: Cash and cash equivalents

 

 

25,924

 

Net debt

 

$

426,255

 

 

 

 

 

 

TTM Pro forma adjusted EBITDA*

 

$

160,608

 

Ratio of net debt to TTM pro forma adjusted EBITDA

 

 

2.65

 

*On a pro-forma basis for Balboa Water Group

 

 

 

 

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 2021 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.  When planning, forecasting and analyzing future periods, the Company does so primarily on a non-GAAP basis without preparing a GAAP analysis.