On August 5, 2024, Helios Technologies Inc (HLIO, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Helios Technologies Inc is an industrial technology company that develops, manufactures, and markets solutions for the hydraulics and electronics markets. It operates under two business segments: Hydraulics and Electronics.
Performance Overview
Helios Technologies Inc reported net sales of $219.9 million for Q2 2024, surpassing the analyst estimate of $215.43 million. The company achieved a diluted EPS of $0.41, aligning with the analyst estimate. The Hydraulics segment saw a 2% increase in revenue, while the Electronics segment grew by 7% compared to Q1 2024.
Financial Achievements
Helios Technologies Inc demonstrated sequential margin improvement over Q1 2024, with gross margins increasing by 40 basis points and operating margins by 220 basis points. The company generated $33.8 million in cash from operations, a 30% increase over the previous year, and reduced total debt by $18.6 million, marking the fourth consecutive quarter of debt reduction.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | Change | % Change |
|---|---|---|---|---|
| Net Sales | $219.9 million | $227.6 million | $(7.7) million | (3%) |
| Gross Profit | $70.6 million | $75.8 million | $(5.2) million | (7%) |
| Operating Income | $26.0 million | $29.5 million | $(3.5) million | (12%) |
| Net Income | $13.6 million | $16.8 million | $(3.2) million | (19%) |
| Diluted EPS | $0.41 | $0.51 | $(0.10) | (20%) |
Balance Sheet and Cash Flow
Helios Technologies Inc ended Q2 2024 with $45.0 million in cash and cash equivalents, up 21% sequentially from Q1 2024. The company reduced its inventory by $7.6 million and maintained a net debt-to-adjusted EBITDA ratio of 3.0x. Capital expenditures for the quarter were $8.1 million, down from $10.5 million in the previous year.
Segment Performance
In the Hydraulics segment, net sales were $145.7 million, a 4% decrease from Q2 2023. The Electronics segment reported net sales of $74.2 million, a 1% decline from the previous year. Despite these declines, both segments showed sequential growth compared to Q1 2024.
Challenges and Outlook
Helios Technologies Inc faces challenges from softening end market conditions, particularly in the agriculture, mobile, and industrial markets. The company has moderated its outlook for the second half of 2024 to reflect these conditions. However, it remains focused on controlling working capital, operational efficiencies, and cost discipline.
"For the third consecutive quarter, the Helios team delivered financial results that met or slightly beat our guidance. The second quarter’s sequential top line growth, expanding margins, and disciplined working capital management validate that the adjustments we have made in the business are yielding positive outcomes," said Sean Bagan, Interim President, Chief Executive Officer, and Chief Financial Officer of Helios.
For more detailed insights and the full financial report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Helios Technologies Inc for further details.
