Upgrade to SI Premium - Free Trial

Helios Technologies Reports Second Quarter 2020

August 3, 2020 4:15 PM

Generates Strong Cash from Operations and Executes Successfully on Cost Containment

SARASOTA, Fla.--(BUSINESS WIRE)-- Helios Technologies, Inc. (Nasdaq: HLIO) (“Helios” or the “Company”), a global industrial technology leader that develops and manufactures solutions for both the hydraulics and electronics markets, today reported financial results for the second quarter ended June 27, 2020.

Josef Matosevic, the Company’s President and Chief Executive Officer, commented, “I am pleased with our management team’s adaptability and leadership during these challenging times and am excited about the opportunities for advancing our strong pipeline of new product development. We performed very well in the quarter with better than expected sales supported by shipment of past due orders and a relatively resilient global agriculture industry. Due to the agility of our businesses, we adjusted quickly to changing market demands related to COVID-19 in both segments and outperformed in the hydraulics segment, while the electronic segment was able to achieve their plan despite tough market conditions. Our solid profit margins on lower sales were the result of disciplined execution and the cost containment measures rapidly initiated in March and April to address the economic downturn from the COVID-19 pandemic combined with continued efforts to improve productivity. The efforts of both segments enabled us to achieve a better than expected consolidated decremental adjusted operating margin of 32%*.”

He continued, “We were encouraged to see demand pick up in June, although given the trend of increasing COVID-19 cases in the U.S., we are carefully monitoring our end markets and customers. We expect our third quarter will now be the trough for us this year given lower levels of backlog at the end of June. We believe from there we should see recovery with improving order levels.”

Mr. Matosevic concluded, “Our objectives through this pandemic are to continue generating strong cash flow and, importantly, to navigate into a strategic position for growth as markets recover. We are developing the additional value streams to augment our Vision 2025 strategy that will leverage the strengths and capabilities of the Helios organization, including our well-respected brands, our dedicated global employees and our strong balance sheet. We believe the enhancements to the strategy will also provide greater clarity on the efforts required to accelerate organic growth through new end markets and new products combined with programmatic portfolio expansion through future acquisitions.”

*Consolidated decremental adjusted operating margin is defined as the change in adjusted operating income divided by the change in sales.

Second Quarter 2020 Consolidated Results

($ in millions, except per share data) Q2 2020 Q2 2019 Change % Change
Net sales

$

119.3

$

143.8

$

(24.5)

(17%)

Gross profit

$

44.7

$

56.2

$

(11.5)

(20%)

Gross margin

37.5%

39.1%

Operating income

$

16.7

$

26.4

$

(9.7)

(37%)

Operating margin

14.0%

18.4%

Non-GAAP adjusted operating margin

19.3%

21.5%

Net income

$

12.9

$

17.3

$

(4.4)

(25%)

Diluted EPS

$

0.40

$

0.54

$

(0.14)

(26%)

Non-GAAP cash net income

$

17.7

$

20.7

$

(3.0)

(14%)

Non-GAAP cash EPS

$

0.55

$

0.65

$

(0.10)

(15%)

Adjusted EBITDA

$

27.0

$

34.7

$

(7.7)

(22%)

Adjusted EBITDA margin

22.6%

24.1%

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 GAAP net income to non-GAAP cash net income and non-GAAP adjusted operating margin, and adjusted EBITDA. 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

Non-operating items

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

First Half 2020 Consolidated Results

($ in millions, except per share data)

2020

2019

Change % Change
Net sales

$

248.8

$

290.7

$

(41.9)

(14%)

Gross profit

$

96.6

$

112.7

$

(16.1)

(14%)

Gross margin

38.8%

38.8%

Operating income

$

6.7

$

52.2

$

(45.5)

(87%)

Operating margin

2.7%

18.0%

Non-GAAP adjusted operating margin

19.9%

21.0%

Net (loss) income

$

(4.3)

$

33.7

$

(38.0)

NM

Diluted EPS

$

(0.13)

$

1.05

$

(1.18)

NM

Non-GAAP cash net income

$

35.7

$

41.1

$

(5.4)

(13%)

Non-GAAP cash EPS

$

1.11

$

1.28

$

(0.17)

(13%)

Adjusted EBITDA

$

57.4

$

69.4

$

(12.0)

(17%)

Adjusted EBITDA margin

23.1%

23.9%

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 and adjusted EBITDA margin as well as reconciliations of GAAP operating income to non-GAAP adjusted operating income and GAAP net income to non-GAAP cash net income and non-GAAP adjusted operating margin, and adjusted EBITDA. Helios believes that, when used in conjunction with measures prepared in accordance with GAAP, non-GAAP measures described above help in the understanding of its operating performance.

Sales

Profits and margins

Non-operating items

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)

Segment sales of $102.1 million declined 10% compared with the prior-year second quarter, impacted by softer end market demand attributable to the COVID-19 pandemic. The decrease also included $1.6 million from unfavorable changes in foreign currency exchange rates. Sales declined in the Americas region by 17%. The Europe, Middle East, Africa (“EMEA”) region declined 13.6%, while Asia/Pacific (“APAC”) region sales grew 5.6%, both excluding the combined $1.6 million effect of unfavorable foreign currency exchange rate changes.

Second quarter 2020 gross margin of 36.7% was down from the prior year’s 37.3% due to reduced leverage of fixed costs on lower sales volume and COVID-19 related production labor inefficiencies. Additionally, during the quarter there was a favorable change in sales mix and savings from cost containment efforts such as over-time management, decreased usage of temporary labor and inventory and supplies costs management.

SEA expenses in the 2020 second quarter decreased $2.8 million compared with the prior-year period, benefiting from cost management efforts.

Operating income in the 2020 second quarter was $22.0 million. Operating margin expanded 30 basis points to 21.5%, compared with 21.2% last year.

For the first half, segment sales totaled $205.9 million; excluding the $3.6 million impact of unfavorable changes in foreign currency exchange rates, segment sales decreased 9.0%. Gross profit declined $7.9 million, or 9.3%, from the prior year period, while gross margin expanded 60 basis points to 37.5%. The increase was primarily driven by effective cost management efforts and production efficiencies. Operating income for the first half was $43.5 million, or 21.1% of sales.

Electronics Segment Review

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

Segment sales were $17.2 million for the 2020 second quarter, compared with $30.1 million in the prior year quarter. The decline was primarily due to decreased demand caused by the COVID-19 pandemic including lost revenue from OEM shutdowns, a soft oil and gas end market and our intentional shift in customer base which involved changes in certain contractual obligations. Foreign currency translation had a minimal impact on segment sales in the quarter.

Second quarter 2020 gross margin was 42.1%, down from 45.8% last year. The contraction was attributable to decreased leverage of fixed costs resulting from lower volume partially offset by cost management efforts.

SEA costs in the quarter decreased by $1.0 million as a result of cost saving and restructuring efforts.

Operating income was $0.9 million in the second quarter of 2020, compared with $6.5 million in 2019. 2020 operating margin contracted to 5.5%, from 21.6% last year.

For the first half, segment sales were down 29% to $42.9 million, compared with the 2019 first half. Foreign currency had a $0.1 million unfavorable impact. Despite the significant sales decline, the 2020 first half gross margin declined just 50 basis points to 45.3% from 45.8% last year. Operating income for the period was $5.7 million, or 13.3% of sales.

Balance Sheet and Cash Flow Review

Total debt was $287.4 million at June 27, 2020, down from $300.4 million at December 28, 2019. Cash and cash equivalents at June 27, 2020 were $37.0 million, up from $22.1 million at December 28, 2019 as the Company focuses on preserving cash. Net debt decreased by $16.7 million from the end of the trailing first quarter and net debt-to-adjusted EBITDA remained unchanged at 2.1x at June 27, 2020, compared the end of the first quarter 2020 and yearend 2019. The Company has $37.0 million in cash and $205.3 million available on its revolving line of credit, which also allows for an accordion of up to an additional $200 million, subject to certain pro forma compliance requirements.

Cash provided by operations was $40.3 million and $25.4 million in the first six months of 2020 and 2019, respectively. The Company generated $25.3 million of cash from operations in the quarter up from $16.3 million in the prior-year period.

Capital expenditures were $5.2 million and $15.4 million for the first halves of 2020 and 2019, respectively, with the decrease in 2020 due to a conscious reduction in light of the impact of COVID-19 on economic conditions. Given the current environment, capital expenditures in 2020 are focused on higher priority and critical projects.

2020 Guidance

Given the uncertainty in outlook due to the impact of the COVID-19 pandemic on the economy and end markets, the Company will not be providing financial guidance metrics.

Webcast

The Company will host a conference call and webcast tomorrow morning 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 can be monitored at www.heliostechnologies.com. Participants will have the ability to ask questions on either the teleconference call or the webcast.

A telephonic replay will be available from 12:00 p.m. ET on the day of the call through Tuesday, August 11, 2020. To listen to the archived call, dial (412) 317-6671 and enter conference ID number 13705886. 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 industrial technology leader that develops and manufactures hydraulic and electronic control solutions for diverse markets. The Company operates in two business segments, Hydraulics and Electronics. The Hydraulics segment markets and sells products globally under the brands of Sun Hydraulics in relation to cartridge valve technology, Custom Fluidpower with regard to hydraulic system design and Faster in connection with quick release coupling solutions. Global Electronics brands include Enovation Controls and Murphy for fully-tailored solutions with a broad range of rugged and reliable instruments such as displays, controls and instrumentation products. Helios Technologies and information about its associated companies is available online at 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 Company’s financing plans; (iii) trends affecting the Company’s financial condition or results of operations; (iv) the Company’s ability to continue to control costs and to meet its liquidity and other financing needs; (v) the declaration and payment of dividends; and (vi) 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) 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 (iii) 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 December 28, 2019 and Part II, Item IA, “Risk Factors” in the Company’s Form 10-Q for the quarter ended March 28, 2020 and other filings with the Securities and Exchange Commission..

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.

Financial Tables Follow.

HELIOS TECHNOLOGIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Three Months Ended Six Months Ended
June 27, June 29, June 27, June 29,

2020

2019

% Change

2020

2019

% Change
Net sales

$

119,294

$

143,842

(17)%

$

248,777

$

290,693

(14)%

Cost of sales

74,575

87,615

(15)%

152,208

177,958

(14)%

Gross profit

44,719

56,227

(20)%

96,569

112,735

(14)%

Gross margin

37.5%

39.1%

38.8%

38.8%

Selling, engineering and administrative expenses

23,600

25,309

(7)%

49,264

51,465

(4)%

Amortization of intangible assets

4,417

4,545

(3)%

8,765

9,066

(3)%

Goodwill impairment

-

-

NM

31,871

-

NM

Operating income

16,702

26,373

(37)%

6,669

52,204

(87)%

Operating margin

14.0%

18.4%

2.7%

18.0%

Interest expense, net

2,891

4,048

(29)%

5,842

8,433

(31)%

Foreign currency transaction loss, net

283

501

(44)%

408

62

NM

Miscellaneous expense (income), net

18

(157)

NM

(76)

(50)

52 %

Change in fair value of contingent consideration

(34)

56

NM

(34)

775

NM

Income before income taxes

13,544

21,925

(38)%

529

42,984

(99)%

Income tax provision

636

4,660

(86)%

4,844

9,315

(48)%

Net income (loss)

$

12,908

$

17,265

(25)%

$

(4,315)

$

33,669

NM

Basic and diluted net income (loss) per common share

$

0.40

$

0.54

(26)%

$

(0.13)

$

1.05

NM

Basic and diluted weighted average shares outstanding

32,081

32,012

32,071

31,995

Dividends declared per share

$

0.09

$

0.09

$

0.18

$

0.18

NM = Not meaningful

HELIOS TECHNOLOGIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

June 27,

December 28,

2020

2019

(Unaudited)
Assets
Current assets:
Cash and cash equivalents

$

36,965

$

22,123

Restricted cash

37

39

Accounts receivable, net of allowance for doubtful accounts
of $1,101 and $1,131

73,018

66,677

Inventories, net

84,950

85,195

Income taxes receivable

2,852

3,196

Other current assets

17,296

15,359

Total current assets

215,118

192,589

Property, plant and equipment, net

140,605

145,854

Deferred income taxes

8,837

5,803

Goodwill

346,071

377,569

Other intangible assets, net

286,522

294,651

Other assets

4,627

5,285

Total assets

$

1,001,780

$

1,021,751

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable

$

29,424

$

29,730

Accrued compensation and benefits

16,457

16,898

Other accrued expenses and current liabilities

12,159

13,549

Current portion of contingent consideration

797

828

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

10,216

7,623

Dividends payable

2,888

2,884

Income taxes payable

9,972

4,941

Total current liabilities

81,913

76,453

Revolving lines of credit

193,948

208,708

Long-term non-revolving debt, net

83,267

84,062

Deferred income taxes

48,084

49,290

Other noncurrent liabilities

27,804

25,602

Total liabilities

435,016

444,115

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,
32,081 and 32,047 shares issued and outstanding

32

32

Capital in excess of par value

367,841

365,310

Retained earnings

257,568

267,658

Accumulated other comprehensive loss

(58,677

)

(55,364

)

Total shareholders’ equity

566,764

577,636

Total liabilities and shareholders’ equity

$

1,001,780

$

1,021,751

HELIOS TECHNOLOGIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended
June 27, June 29,

2020

2019

Cash flows from operating activities:
Net (loss) income

$

(4,315

)

$

33,669

Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization

17,021

17,195

(Gain) Loss on disposal of assets

(15

)

79

Goodwill impairment

31,871

-

Stock-based compensation expense

2,447

2,781

Amortization of debt issuance costs

358

358

Benefit for deferred income taxes

(2,370

)

(1,095

)

Change in fair value of contingent consideration

(34

)

775

Forward contract gains, net

(41

)

(409

)

Net investment hedge loss

164

-

Other, net

510

940

(Increase) decrease in operating assets:
Accounts receivable

(7,040

)

(9,586

)

Inventories

(724

)

(12,276

)

Income taxes receivable

327

(488

)

Other current assets

(1,736

)

(3,312

)

Other assets

1,855

781

Increase (decrease) in operating liabilities:
Accounts payable

(18

)

1,178

Accrued expenses and other liabilities

(1,424

)

4,176

Income taxes payable

4,885

3,078

Other noncurrent liabilities

(1,390

)

(1,668

)

Contingent consideration payment in excess of acquisition date fair value

-

(10,731

)

Net cash provided by operating activities

40,331

25,445

Cash flows from investing activities:
Capital expenditures

(5,215

)

(15,413

)

Proceeds from dispositions of equipment

67

597

Cash settlement of forward contracts

(357

)

-

Net cash used in investing activities

(5,505

)

(14,816

)

Cash flows from financing activities:
Borrowings on revolving credit facilities

11,000

85,639

Repayment of borrowings on revolving credit facilities

(26,359

)

(91,000

)

Borrowings on long-term non-revolving debt

5,714

-

Repayment of borrowings on long-term non-revolving debt

(4,001

)

(2,910

)

Proceeds from stock issued

723

843

Dividends to shareholders

(5,772

)

(5,759

)

Payment of contingent consideration liability

-

(7,064

)

Other financing activities

(960

)

(1,141

)

Net cash used in financing activities

(19,655

)

(21,392

)

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

(331

)

569

Net increase (decrease) in cash, cash equivalents and restricted cash

14,840

(10,194

)

Cash, cash equivalents and restricted cash, beginning of period

22,162

23,515

Cash, cash equivalents and restricted cash, end of period

$

37,002

$

13,321

HELIOS TECHNOLOGIES

SEGMENT DATA

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended
June 27, June 29, June 27, June 29,

2020

2019

2020

2019

Sales:
Hydraulics

$102,089

$

113,710

$

205,907

$

230,173

Electronics

17,205

30,132

42,870

60,520

Consolidated

$119,294

$

143,842

$

248,777

$

290,693

Gross profit and margin:
Hydraulics

$37,473

$

42,407

$

77,147

$

85,040

36.7%

37.3%

37.5%

36.9%

Electronics

7,246

13,820

19,422

27,695

42.1%

45.8%

45.3%

45.8%

Consolidated

$44,719

$

56,227

$

96,569

$

112,735

37.5%

39.1%

38.8%

38.8%

Operating income and margin:
Hydraulics

$21,989

$

24,123

$

43,471

$

47,885

21.5%

21.2%

21.1%

20.8%

Electronics

939

6,488

5,717

13,000

5.5%

21.6%

13.3%

21.5%

Corporate and other

(6,226)

(4,238)

(42,519)

(8,681)

Consolidated

$16,702

$

26,373

$

6,669

$

52,204

14.0%

18.4%

2.7%

18.0%

HELIOS TECHNOLOGIES

ADDITIONAL INFORMATION

(Unaudited)

2020 Sales by Geographic Region and Segment
($ in millions)
Q1 %
of Total		 Q2 %
of Total

2020

%
of Total
Americas:
Hydraulics

$

37.3

$

34.2

$

71.6

Electronics

21.6

13.4

35.0

Consol. Americas

58.9

45%

47.6

40%

106.6

43.0%

EMEA:
Hydraulics

33.5

31.2

64.7

Electronics

2.5

1.9

4.4

Consol. EMEA

36.0

28%

33.1

28%

69.1

28.0%

APAC:
Hydraulics

33.0

36.7

69.6

Electronics

1.6

1.9

3.5

Consol. APAC

34.6

27%

38.6

32%

73.1

29.0%

Total

$

129.5

$

119.3

$

248.8

2019 Sales by Geographic Region and Segment
($ in millions)
Q1 %
of Total		 Q2 %
of Total		 Q3 %
of Total		 Q4 %
of Total

2019

%
of Total
Americas:
Hydraulics

$

41.6

$

41.2

$

43.3

$

36.2

$

162.3

Electronics

26.1

26.6

24.0

19.5

96.3

Consol. Americas

67.7

46%

67.8

47%

67.3

49%

55.7

44%

258.6

47.0%

EMEA:
Hydraulics

41.8

36.8

31.9

31.1

141.6

Electronics

2.5

1.8

2.1

2.0

8.4

Consol. EMEA

44.3

30%

38.6

27%

34.0

25%

33.1

26%

150.0

27.0%

APAC:
Hydraulics

33.1

35.7

34.9

35.2

138.9

Electronics

1.8

1.7

1.8

1.9

7.2

Consol. APAC

34.9

24%

37.4

26%

36.7

26%

37.1

30%

146.1

26.0%

Total

$

146.9

$

143.8

$

138.0

$

125.9

$

554.7

HELIOS TECHNOLOGIES

Non-GAAP Adjusted Operating Income RECONCILIATION

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended
June 27, June 29, June 27, June 29,

2020

2019

2020

2019

GAAP operating income

$

16,702

$

26,373

$

6,669

$

52,204

Acquisition-related amortization of intangible assets

4,417

4,484

8,765

8,945

Acquisition and financing-related expenses

-

-

74

11

Restructuring charges

298

-

298

-

CEO transition costs

1,644

-

1,809

-

Goodwill impairment

-

-

31,871

-

Non-GAAP adjusted operating income

$

23,061

$

30,857

$

49,486

$

61,160

GAAP operating margin

14.0%

18.4%

2.7%

18.0%

Non-GAAP Adjusted operating margin

19.3%

21.5%

19.9%

21.0%

Adjusted EBITDA RECONCILIATION

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended Twelve Months Ended
June 27, June 29, June 27, June 29, June 27,

2020

2019

2020

2019

2020

Net income (loss)

$

12,908

$

17,265

$

(4,315)

$

33,669

$

22,285

Interest expense, net

2,891

4,048

5,842

8,433

12,796

Income tax provision

636

4,660

4,844

9,315

10,567

Depreciation and amortization

8,645

8,624

17,021

17,195

35,041

EBITDA

25,080

34,597

23,392

68,612

80,689

Acquisition and financing-related expenses

-

-

74

11

74

Restructuring charges

298

-

298

-

2,022

CEO transition costs

1,644

-

1,809

-

1,809

Goodwill impairment

-

-

31,871

-

31,871

Loss on disposal of intangible asset

-

-

-

-

2,713

Other

-

-

-

-

127

Change in fair value of contingent consideration

(34)

56

(34)

775

(157)

Adjusted EBITDA

$

26,988

$

34,653

$

57,410

$

69,398

$

119,148

Adjusted EBITDA margin

22.6%

24.1%

23.1%

23.9%

23.2%

HELIOS TECHNOLOGIES

Non-GAAP Cash Net Income RECONCILIATION

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended
June 27, June 29, June 27, June 29,

2020

2019

2020

2019

Net income (loss)

$

12,908

$

17,265

$

(4,315)

$

33,669

Amortization of intangible assets

4,417

4,545

8,765

9,066

Acquisition and financing-related expenses

-

-

74

11

Restructuring charges

298

-

298

-

CEO transition costs

1,644

-

1,809

-

Goodwill impairment

-

-

31,871

-

Change in fair value of contingent consideration

(34)

56

(34)

775

Tax effect of above

(1,581)

(1,150)

(2,728)

(2,463)

Non-GAAP cash net income

$

17,652

$

20,716

$

35,740

$

41,058

Non-GAAP cash net income per diluted share

$

0.55

$

0.65

$

1.11

$

1.28

Net Debt-to-Adjusted EBITDA Reconciliation

(In thousands)

(Unaudited)

As of
June 27,

2020

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

$

10,216

Revolving lines of credit

193,948

Long-term non-revolving debt, net

83,267

Total debt

287,431

Less: Cash and cash equivalents

36,965

Net debt

$

250,466

Adjusted EBITDA, TTM ended June 27, 2020

$

119,148

Ratio of net debt to TTM Adjusted EBITDA

2.1

Non-GAAP 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 to other similarly titled measures used by other companies.

Deborah K. Pawlowski / Christopher M. Gordon

Kei Advisors LLC

(716) 843-3908/ (716) 843-3874

[email protected] / [email protected]

Source: Helios Technologies, Inc.

Categories

Business Wire Press Releases

Next Articles