Helios Technologies (HLIO) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $219.9M, down 3% year-over-year but up 4% sequentially, with Hydraulics up 2% and Electronics up 7% from Q1 2024.

• Diluted EPS was $0.41 (GAAP) and $0.64 (Non-GAAP), with Non-GAAP EPS up 21% sequentially but down year-over-year.

• Cash from operations reached $33.8M in Q2, up 30% year-over-year and 90% sequentially; cash on hand at quarter-end was $45.0M.

• Management focus remains on margin protection, cash generation, debt reduction, and operational efficiency amid leadership transition.

• Outlook for 2H24 moderated due to softening end market conditions, with continued emphasis on cost discipline and customer service.

Financial highlights

• Q2 2024 net sales: $219.9M (down 3% year-over-year); gross margin: 32.1% (down 120 bps); operating income: $26.0M (11.8% margin, down 12%).

• Adjusted EBITDA margin was 20.1%, up 190 bps sequentially but down 190 bps year-over-year.

• Net income for Q2 was $13.6M, down 19% year-over-year; free cash flow for Q2 was $25.7M.

• Inventory reduced by 4% since year start; capital expenditures were $8.1M (3.7% of sales).

• Net debt leverage ratio reduced to 3.0x, with total debt down 4% from year-end 2023.

Outlook and guidance

• Full-year 2024 net sales guidance revised to $825–$840M, reflecting macro headwinds and lower order demand.

• Adjusted EBITDA margin guidance maintained at 19.5%–21%; non-GAAP EPS expected at $2.25–$2.45.

• Q3 sales expected at $192–$200M, with adjusted EBITDA margin of 20%–21%.

• Capital expenditures for 2024 forecasted at 3.5%–4.0% of sales; effective tax rate expected at 21%–23%.

• Hydraulics segment revenue expected to decline 1%–3% year-over-year; Electronics segment to grow 2%–4%.