Helios Tech Sees Sales Surge, Turns Turnaround Tale

Helios Technologies has entered a new phase in its turnaround strategy following a strong second-quarter performance reported on August 10. The company achieved $232 million in sales, aligning with its guidance, and surpassed earnings expectations. This streak of double-digit pro forma growth in both sales and adjusted earnings has now extended to four consecutive quarters.

Within its segments, Electronics outperformed with a 19% sales increase to $86 million, bolstered by demand in recreational, health, wellness, and industrial markets. Hydraulics contributed positively with a 14% pro forma sales increase, particularly driven by a record pace in the Asia Pacific region. The company's financial health has also improved, with net debt dropping to $264 million, the lowest since the third quarter of 2020, and leverage at 1.4 times EBITDA.

Despite these positive results, the outlook for the third quarter suggests a potential slowdown. Management has guided for an 8% sales growth midpoint, a notable deceleration from the 16% reported in the second quarter. Adjusted EBITDA margin is also anticipated to slightly decrease year-over-year, reversing a trend of four consecutive quarters of expansion. This anticipated moderation is attributed to tougher year-over-year comparisons and the timing of market recoveries and business wins.