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• Sales: $180 million in Q4 2024, slightly above the upper end of guidance.

• Gross Margin: Expanded 150 basis points in Q4 despite a 7% decline in sales.

• Operating Income: Grew 12% in Q4, with operating margin expanding 120 basis points to 7.4%.

• Adjusted Operating Margin: 13.3% in Q4, up 70 basis points from last year.

• Adjusted EBITDA Margin: Expanded 70 basis points over the prior year period.

• Effective Tax Rate: 37.2% in Q4; full year rate was 22.8%.

• Diluted EPS: $0.14 in Q4, up 40% due to a one-time gain.

• Diluted Non-GAAP EPS: $0.33 in Q4, down 13% from last year.

• Free Cash Flow Conversion Rate: 244% for the year.

• Cash from Operations: $35.7 million in Q4, a 6% improvement over last year.

• Inventory Reduction: $25 million or 12% in 2024.

• Capital Expenditures: $7.4 million in Q4, totaling $27 million for the year.

• Total Debt Reduction: 14% or $75 million over the year.

• Net Debt to Adjusted EBITDA Leverage Ratio: Reduced to 2.6 times.

• 2025 Sales Outlook: $775 million to $825 million.

• 2025 Adjusted EBITDA Outlook: $140 million to $165 million.

• Share Repurchase Program: Authorized up to $100 million in shares.

• Warning! GuruFocus has detected 5 Warning Signs with HLIO.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Helios Technologies Inc (NYSE:HLIO) launched several innovative products in 2024, including new cartridge valves and electronic displays, which could drive future growth.

• The company achieved record cash generation in 2024, focusing on cash conversion and reducing inventory, which strengthened its financial flexibility.

• Helios Technologies Inc (NYSE:HLIO) improved its balance sheet by reducing and refinancing debt, resulting in lower borrowing spreads.

• Operational efficiency improvements led to expanded quarterly margins despite softer revenue, showcasing effective cost management.

• The company announced an inaugural share repurchase program, indicating confidence in its cash flow generation and commitment to shareholder value.

Negative Points

• Sales in key markets such as agriculture, mobile, and industrial remained weak, impacting overall revenue growth.

• Foreign exchange negatively impacted sales by $100,000 in the fourth quarter, highlighting exposure to currency fluctuations.

• The company faced production disruptions due to hurricanes, losing 18 cumulative shifts at its Sarasota operations.

• The effective tax rate for the fourth quarter was higher than expected due to changes in income mix and discrete items in foreign jurisdictions.

• Tariff uncertainties pose a potential risk to the company's supply chain and cost structure, particularly affecting the electronics segment.