HLIO - Earnings call 4 2023 | Helios Technologies, Inc.

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Operator

Greetings, and welcome to the Helios Technologies Fourth Quarter 2023 Financial Results. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Tania Almond, Vice President of Investor Relations and Corporate Communications. Thank you.

You may begin.

Tania Almond

good and operator, you, day, everyone. Thank the conference call. to Helios Technologies results financial XXXX Quarter Fourth Welcome We press issued afternoon. a announcing our yesterday results

you that our have do is If on available release, website it hlio.com. at not

find also conversation will will accompany slides You our today. that there

our line are fourth Josef quarter Sean Executive and President Chief Matosevic, our with me the will our review Chief our outlook results Bagan, Officer, Financial On for with XXXX. and along Officer. They

the We to call will questions. open then your

Slide to statement. turn If will Harbor you you our Safe X, find

actual and As subject make those from you to may some uncertainties, that forward-looking be results today. are Q&A presented cause as aware, risks to we statements to will during session. well differ this the that factors as apply materially statements These and future events other presentation could

and risks to XX-K Exchange filed These be will and factors our Commission. uncertainties provided Securities upcoming in with and the be other

documents point our measures at believe You non-GAAP or financial useful can which website during these will some we evaluating in that on call, are out find discuss our also performance. we I'll sec.gov. today's

accordance should GAAP. the presentation of in or as this You a substitute not results prepared information in for additional consider isolation with

with non-GAAP to Josef. accompany have reconciliations comparable X turn call over in that, to the of We slides. it's the tables now. With provided that Please X measures GAAP today's through Slides reference my pleasure

Josef Matosevic

and you, everyone. thank welcome Tania,

our now delivered mirror. the We is quarter. in rear-view for as recently committed XXXX fourth

As company our years several started many business into journey you of ago. know, integrated operating we an this transform to

with several and a events. and and it determined was through emerged united a as As of We team. it I progress focus geopolitical year XXXX, challenges reflect along all solid macroeconomic more kept our on

our strategy X remaining We key elements. continued on to centered advance by

made manufacturing in First, the our we priorities were strategy. our major consciously investments one of

capacity see to consolidating opportunities our expect they expanding the Helios and business broaden workflows Excellence Centers address of by operational We we will excellence drive in position us. and capabilities. before growth and for We new invested

As various these relocated activities, functions. part of we operations and

provide as lower backup Mexico. needed in efficiencies, outcomes risk, India the capability as further expand increase manage to The will cost regional and manufacturing well

Our Excellence facility quarter Tijuana. were in opened of we fourth our starting in the and Hydraulics Electronics just X North fully new American Centers operational

to We up just for the maximize will year. our in financial shareholder our value. the over even capacity are finishing these year We the investments believe reached impacted process somewhat where our as were expand strategy for XXXX. sales for Faster critical Italy, All full this levels it record future, results long-term on

gaps, fill on we strategy to build acquisitions. diversify with executed Second, and to product out our talent solution revenues, our and pool

the to of addition collection to Schultes flywheels, incredibly premium we our tough assembled us to of add iX follow. have capabilities and a make of that string With

reach diversify further existing we the in efforts continued in to ones. deepen and we necessary our macro our headwinds, face the Even Third, innovation into made markets product our development. and of investments significant

design are and problems customers’ with solutions. difficult most system integrated We solving increasingly production

future. our growth to define we can these will expect positioned which well are and We be serve significant contributors opportunities help

transformation complete nearly is point. this Our at

help elevate global the of Now second disruption Centers the it's we recognize in Realizing the a challenges largest continue the necessary integrated all year, We the from continue market the up we minor took standing company. the of business decision contributed. Excellence also volume and on half margins. invest faced about business. Lower had the clearly to to actions our the execution in impact to we as into to operating protect

please. I will to turn about our now, will results XXXX. talk Sean financial more over you as well outlook for as and our our priorities it Sean,

Sean Bagan

and Josef everyone. you, Thank hello,

and slides providing speak X points some plan of color. Sales our financial priorities slides from softness bit up the and on through a expectations Balboa in APAC, fourth in quarter continued with decline due year driven and on believe quarter results quicker on I by quite themselves recent XX% a our start be me and backlog. to last review stronger a Before catch of key quarter, for had talking which fourth end in the provide a hitting results additional to so higher a for I the and to our with in Americas, Compared discuss of came the let XX. a XXXX, for the X% EMEA, we detail, improvement I X% at most China. year’s in Hydraulics decline

saw growth last in on across we call, comp several first the wellness time, quarter the 'XX, granted health the for earnings swift off mark. see although we year shifts is fourth persisted did since low in and As water markets our we the QX cited year over the

that a three highs first of the contracted reminder, a market As from quarters its had pandemic during correction year-over-year and XXXX.

XXXX, Our and fourth also impacting industrial, the third of markets shifts quarter. some marine, the recreational-based quarter in had rapid

declined improved, was Sequentially, while Electronics several modestly across Hydraulics categories.

lower profit gross $X.X expected, and and XXX absorption. quarter impacted year-over-year As contracted margin declined to million the Gross margin XX.X%. to and in year-over-year volume points due under gross heavily profit sequentially basis

quarter. addition our margins to quarterly SEA erosion our acquisitions SEA The was $XX.X lowest two the year was the the testament of first of in decline to in $X.X compared run-rate the expenses the or with half. X% efforts expenses the million despite trailing contain A million, level third of

what Our imperatives. be those define impacting can focus strategic without as expenses our or that was on deferred, looking – flexible I at

volume offset are impact being is Year-over-year, EBITDA reduction where exacerbated for initiatives. our quarter despite business the expanded cost and the Volume of of only capacity. margins have decremental $XX.X XX.X% our was we of the higher significant modestly in reflects as million, or by SEA acquisitions. expense investments lower Adjusted sales, the

leverage volume to As starts the up. operating positive return will show

average XX.X% the expense the Diluted discussed. from effective interest impacts from This year. by different mix $X.XX in and Our driven increased It of fourth Hydraulics in down our markets the in also the reflects $X.XX prior interest quarter quarter as segment. was rates Slide by XX.X% an were find with over Sales on Non-GAAP were higher of the the and rate tax saw the balances I’ve debt will impact for quarter the across cited tax we end is last review year we shifts down the quarter. regional third swift compared several Sales you of segment, full year. Briefly jurisdictions. XX, period. EPS fourth includes X%,

the up We small data also from a seeing. saw channel been we had take inventory step declines

$X.X We million impactful XXXX period. going do sales a becomes We metric into normalized has exchange again favorable it plan about due unless delayed range. not again. chain shortages, a this breakout to foreign which were estimate more more to the We segment back to million to to acquisitions sequentially, supply improving in did modestly had lower million fully profit leveled points. profit and continue impact $X.X improved while prior-year the points and costs, margin year-over-year compared Sequentially, not higher gross margin increased, in basis gross Hydraulics by million. Gross offset volume, to declined contracted pricing basis XX modestly XXX $X.X resulting as contraction wage gross Sequentially, and $X.X restructuring costs. of benefit

expenses quarter. sequentially the third compared with SEA or X% $X.X declined million

while impacts as to maintaining inflation Our measures well of the costs, labor R&D. as acquisitions, run-rate operating and our with overcome cost investments in helped the containment

discuss we’ll to Please and segment. Electronics Slide the XX turn

effects foreign segment million the revenue $X.X or from declined concentration, were $X.X million, currently. sales million Approximately X%, $X.X U.S. in segment this in nominal sales delayed chain, in which by currency has acquisitions. Year-over-year, its due also including supply this Given sales for improved electronics to sequentially.

sequentially. down impacted we XX% double timings quarter order cited last quarter, that rapid markets fourth with had As wellness and several Though, year-over-year. sales was up shifts in health digits

we trends this been encouraged been seeing year. so have the and by in wellness health have We far

We again that expect planning to are market. lapped now and to comps the have growth end deliver once in tougher

down volume year points. was absorption, X% with X% down down sales and gross year-over-year, and costs, trailing XXX $XXX,XXX quarter. impacted in expenses which of gross compared under with last SEA third compared basis margin mix and the Material resulting contraction profit, were

containment investments. while maintaining As noted focus we cost are disciplined executing with efforts, Hydraulics, R&D on a

review to Please Slide XX cash our turn a flow. for of

the cash have we that Given the generated managing pleased the through, flow was during with free been challenges quarter. macro are we

operations the the will build this to XXXX. quarter. cash highest momentum We $XX.X level look on line from of generated top We our of year lowest upon in million,

footprint disciplined capability We free had cash quarters realignments, quarter. of and X.X% Capital XXXX. in demonstrates of management This million and was investments measurably of the conversion. working $XX this quarter in the strong improved expenditures capital prior completion marks million capacity of three in round of our $X.X cash upgrades. flow This the for near sales over

For of sales, the capital X% or expenditures $XX.X million. year, was

flow X Free million Adjusted cash of it’s years. been XXXX, rate -- highest For conversion XXX% with a $XX.X in the last the was

Turning to Slide XX.

and cash as had entered XXXX. available were revolving credit in continued and stable was lines financial At with million, flexibility. us year our we cash fourth balance $XXX.X Our quarter end, liquidity ample sheet providing we $XX.X million on of fiscal the equivalents

While we XXXX, million in just $XXX year million. $XX spent acquisitions, investments capital debt million expenditures and was during $XX.X or our end for up in million about at $XXX

million year adjusted end, was debt paid the At $XX to X.XXx. we our approximately Further, quarter. down during debt of net EBITDA fourth ratio leverage

closer moving We flex as for range Ultimately, we and we times to investments. X to below lower XXXX end in X.Xx. have debt to up are X reduction our the get of acquisitions ability and other prioritizing targeted the

for XX our to XXXX. expectations Slides Turning to providing XX, are we initial

have we production about. Our accordingly. the those include and talked secured agreed orders systems projects Once we sales schedules estimates do upon, are will update not large

at in $XXX million moderate growth X% over million. we the This the range of For expect revenue range. just midpoint of XXXX, represents of $XXX the to

EBITDA million, $XXX adjusted double-digit about We for of low-single year $XXX million growth. to expect the to for

XX% an of over mid-point slightly range. Adjusted EBITDA represents margin the This the at

resulting markets volumes capacity EBITDA over will margins our the our newly driving utilization improve recover to Adjusted expanded scale time. grow, our and incrementals As our in

specked and additional get sticky solutions, these system growth. very into in be recurring opportunities, nature margin we as accretive will Additionally, software including new enable

million net paired cost measures we on modest certain the a expect the million, double-digit strong we taken, have our increases low-single-digit, $XX items, of income $XX range non-recurrence with top-line improve to of measurably to to growth. With

basis half basis. be the We a expect the half to year to on comparable grow a of back first increasingly year-over-year the of XXXX while on tougher

XX% we bottom-line $XXX million of For with revenues EBITDA to sequentially approximately XX%. in range $XXX to improving quarter, the and expect first million sequential the improvement likely top- margins to adjusted with

with underlying review Josef that to financial slide structure you on financial XX, This execution about to Looking our that want establishes priorities discipline I all driving mentioned. performance XXXX for year deliver and returns our is and investments. to the

XXXX: our X, the X, improvement capital working We cash while and and financial conversion operating discipline; in cost investment utilizing cash debt fully initiatives; profitable inherent proceeds. our in instilling have priorities on realizing by sales sustainable shorten leverage through clear flow growth plan X, our cycle execute business, conversion free reduce

commitments our strive for XXXX. year delivering in critical is this as execution results know in We more predictable we

renewed to expect elevate will focus scalable, company into turn financial We integrated are this which in operating Helios be evolving. we the

expect earnings we cost to we on our improving returns priorities have drive exceed these will that that the continually With made. of investments deliver capital

turn me closing it some let So to remarks. Josef back for

Josef Matosevic

you We discipline the Thank and the you are structure much, embedding appreciate into Sean. financial organization.

and keeping very encouraged am is I our on focus tenacity goals. XXXX our our about future. with It about

executing that our margins, company operating the and are plan We advancing organization and top-tier can integrated an cash growth. flow deliver to

foundation that we positioned. over can of and Technologies we talented years has the companies thanks people that last are dedicated, Helios now have to from family is the for elevate. What It several which done its we so the well work created

and solutions integrated customers. efficiencies for critical, that provide sticky, creating with productivity lower costs our life improved are cycle We

markets We I Helios. the year next recover, believe as are for very few good ready look and

With please. that, let's Q&A, open the lines for

Operator

Chris comes of line first Instructions] [Operator with Our Moore the Securities. question CJS from

Christopher Moore

to potential which trying kind the markets? have markets still at From an just improvement how throughout year end understand lowest in of and any perspective, the end looking visibility market the you're

Sean Bagan

for is thanks the question. Chris, Sean. This

of the trends lot into same cited the quarter market fourth As we third that we on got quarter, the call persisted. a

we're into of As new year, pockets we recovery. get the seeing

saw most Electronics been products, it's and first to has in persisted of area then encouragingly Hydraulics, see for those mixed. post-pandemic the segment, go that and really the certainly, have quarter Electronics health the over heavily. But you gains turnaround are little fourth we industrial from sequential and the that construction And So the kind breaking the and been ones time area watermark. wellness within that direct year-over-year start and Hydraulics the as between uptick segment. Certainly the marine to

Christopher Moore

change you in Can of Got gears the it. going bit switch talk distributors that. OEM bit. much? appreciate that in I to little about to and little Maybe XXXX? and you Is that 'XX a -- the a expect mix expectation

Sean Bagan

Yes.

XXXX. up of in to closer getting we So team is product continue more towards the we customer extension OEM of go us with that points. trend in new a X help kind the about their existing And to them just being part did year-over-year, engineering of that saw development. Within to

are we customers. get So just we that in of XXXX, again, as over the XX%. And our about if think XXXX, continue, OEMs sales; trend closer anything, XX% to our to

Christopher Moore

very helpful. more flow Maybe maybe quarter bit and talk That's the Obviously, at Awesome. thoughts allocation point? one. last low capital flow. 'XX strong cash revenue. despite relatively of And kind about expectations Cash just a little for very this

Josef Matosevic

the structure experience costs provide investments improved us allocation cost Center don't we gross clearly we to also So to us clearly supply and proper pricing call And will and a will that the in market duplication the margins times. areas, terms X or continue better were materials X capital here, we our better power, back in levels, in focused of in in leverage, and power planned as of too then lead piece, as one in previously chain and X duplication facilities. developed see will that historical sitting efficiencies recover, as the in a it us allow better improve gives logistics customer manufacturing as what purchasing the and Excellence I it, it more much communicated, avoid have operations to have our

sticky additional the step in company end markets. we investment new on our growth gain have in the development, third piece protect capacity acquired second additional In with and business our strategy been system the the consistent The to solutions communicating. was with momentum to subsystem, to was investment area product support new and integrate new sales and level

combined to to to transformation capital over only sheet. important allocation terms this that not a grow, will Faster position profitably is really but X solution our sticky up expectation time, all location in balance our So flexible highly with very much pretty and of wrapped be was margins and grow us stronger besides

So that's today. we stand in where terms of allocation capital

Operator

line [Operator Jeff the of KeyBanc Hammond Instructions] Our next question with from Markets. comes Capital

David Tarantino

This in for Hydraulics comment a kind an Maybe businesses? us kind is slowing the of Tarantino real that inventory the you was you're demand quarter. I on to underlying could step an into on seeing perspective, just versus underlying you in David what update XQ. channel Jeff. across of from give saw the wanted What dig destocking up in

some just I see, destocking moving want that's we So to if XXXX. of headwinds How still to into have kind expected progress?

Sean Bagan

Yes.

Hydraulics characterize not would movement I inventory, So distributor a small uptick in the anything there. significant

drop a continue that demand most year. from the an more of end of product, an orders wellness then distributor and and and seeing in as and across think that's we're grow partially we market I to within segment businesses growth it's guiding uptick Hydraulics ag inventory for too not a bit an that be in us, it's with see And and delay why perspective, for challenges. From or supportive of a truly segment where exception there. clearly year-over-year. little sequentially expect how demand both health of next continues orders, nicely, much up highlighted, marine of markets year-over-year perspective, much that very rep in a a we our more into to so we pushout translating that to And

Tania Almond

distributor that fourth building step-up new just can the just going I that a of quarter little be seasonal, year. David, in would a color sometimes add into little And the kind

that well. So historically we've seen as

David Tarantino

particularly the last some the better quarter. in operational It sense. businesses understanding moving relative those just That have the maybe headwinds of between then margins quarter, maybe parts like the Great. to maybe a abated. give Okay. experienced And sounds you us in could makes of the

of this on Maybe was mostly volume. maybe color just just So lower quarter kind some give there.

Josef Matosevic

coupled Clearly, driver tempering was and margins made. finishing investments off the headwinds David. volume biggest we the Yes, the and have on by those

the add on So that's all. I David. something pretty of don't X ahead. to much want the to you if key know that Go first reasons,

Sean Bagan

to health and with segment just low as off again, I very coming going a we've was highlighted back. highlight that base. David, It's wellness

the from there support aren't a perspective, margins just mix segment Hydraulics. that or the And Electronics even margin so

And headwind to little that and fixed company we're a into had, haven't some perspective, from bit historically mix certainly costs next the that need an it overall had a going year. so all capacity we're bringing just had but we on as get we of the

David Tarantino

parts Great. costs investments give us of remain weaker? the just you Okay. balance versus sneak color if controlling kind And -- moving bit little could just on a that, kind longer-term maybe guide, the could I particularly as we've those of in, just you one more margin been on on making some markets how

Sean Bagan

Yes.

is profit expectation our margins. our gross we're going to So grow

also weakness the expect We management lot a about business. to half top to efforts we saw the in took our continue are materializing. talked of -- we second when and we the year, throughout cost we some invest measures market Certainly, line

will our get measured on we don't ourselves. ahead costs, be layering so and very We of R&D in expand expenditures just

Operator

of Jones Our next the question comes Nathan Stifel. from line with

Nathan Jones

I on the the seasonally is with from moment. sequential there's think at for XQ to start don't disruption guidance a you lot a It's guess the pretty of typical which XQ. guys. step-up, the Obviously, question I'll really I -- on step-up nice

full a $XXX the XQ. And the up million million, Xx through the year you guidance sequential get to full little driving you is get you to provide and you million ramp color year $XXX of then, step-up the more if Xx what's just to to which $XXX on $XXX to below a like guidance, rate million in get So revenue XQ rest where only is. would very run got like can seem maybe it doesn't heroic that kind to year, from of that you've

what that into kind baking market us underlying demand year you're So any improvement full on you commentary of can give guidance?

Josef Matosevic

let here realistic with maybe want of we guys, so to right take approach Nathan, here. question your you we guidance. very budget we Yes, now we from feedback much pretty see out and the now, it to having When me a right all second start stands as significant received and built what felt our

And to question. so comfortable terms your guided feel Street in we have #X, of we with this first #X. And The what

up think health in growth. the to lower watermark the QX improved and step the I visibility with and drives wellness some QX

Sean Bagan

quarter would have watermark. fourth obviously, suggest color referenced other and to what only The so quarters is you the quarter. the previously Yes. than add Nathan, into would the just most there, fourth months But our X way seen in other you've greater. I QX, that lower I'd low step-up we're almost was

So we quarter have sight number. pretty good into first line of that

of up why So to QX. And them on try stepping the QX for our specific expect the segments But pretty $XXX run to prepared we X with feel we kind doing that's that into math, that not you segment. Both to as million. and quarter other be isolated remarks. that's grow good, $XXX pretty range million first that we as get to quarters, highlight, rate it's

the that past. delivered the hasn't company levels in not So

got we've so some can that deliver we those. confidence And there

Nathan Jones

got And you've to guidance and quarter for the XX%. at then first the XX% slightly margin XX% the EBITDA over year full

we not points that So XXX as expecting margin through And huge into XXXX, that's more up there's go XXX, the point XXXX. we off jumping up a go something we EBITDA we margins, what through at expansion drives as year the should exit to year? as if XX%, and XX% volume ramp be in basis the like go

Sean Bagan

Yes.

yes. directionally, you're So

XX-ish in XXXX. we end that get can XXXX by into the as we think range I exit of

stepped time. it think over what I up

So things. couple of

lot the in into fourth typically pricing in that quarter. quarter is materialize later that then first effect A second until we our the of the First quarter. doesn't do and

help So will that us.

cannot we base investments more our as highlighted help. And done through volume cost And dropped. then efforts the all quickly on the back-end we that, on this fixed volume referenced we've then that push -- as leveraging be continue underestimated Excellence Centers of that finally, how that the Josef and our Balboa year secondly, recovery to that will

for you If operation cost other that we have lower it's the structure with places. Tijuana facility, think cost that about than our

a incremental get the as other than bigger increases, you our drop volume so businesses. And

Nathan Jones

to in when in those more on that's And I'll year to Is need expectation. on just still if sneak so, to the ag system that be and machinery it would orders order placed your sales expectation go to supply for out you XXXX the customer? going one model

Tania Almond

about I another think of trying expectation think is, like everyone just even the and want feedback Nathan, and we've from is we've industrial. I from interest And end related Think potential by that, markets on around food I more kind ag, the There's to be that opportunities know that white kind -- a system cautious dishwashing, like add radar. this I the on to that of increasing think laundry, what about talked conversations. And very areas area specific up We've encouraged sales level popping some about to at and we've gotten of call. seeing more be the we've we like number there's set things about expanded a just But -- any of to customer even been we're one commercial talked deal, we'll goods. things very high service. about a right? since construction, lot seem talked that

I the these let on get just And as we across think obviously to nose to cycles. focused line, stay know. everybody as the we'll beyond our for of and a soon opportunities want grindstone, I keeping of finish XXXX any and then think there's lot product we executing

Operator

Mig next Our question with Baird. line comes of the Dobre from

Mircea Dobre

chance you with calling that point. 'XX. have to conversation system system guidance, it But sales? on in being benefit these it are understand actually sort the we guidance a could for as Nathan XXXX on a out that specifically out from Just the out of there left of follow-up some better than you're you of left is sales zero since

these potential the question, I system a more Or asking to or the sales. guess is all same understand what XXXX we're XXXX benefit of like cycle look for trying sales this would

Josef Matosevic

model Tania zero there opening be to to on accurate. our stewards reiterate to chance the heavy Mig, is the I Like we get revenue and Yes. on recurring and and you're better good I subsystem pretty said, the the analysts and communicating. with have lifting been you and are We very continues. than be continues here investors that want the path want feedback think from

communicate and able schedules it fully through And as and actually exact identified to and we volume. it are will capable communicate the production finish get we our line timing and have the

Sean Bagan

Its' But lens to you Sean. I a my we my and when wanted driven to how soon ultimately, different finance ultimately system is the perspective leading to we're and order is and as control just not sale too when by we going get indicator ultimately, conversations agreements OEM place that an a have service from an give we in accounting will with have. discussions engineering us.

so products Would they're commit features, dollars commitments and making working tell codeveloping we've agreements them. that and place those with us, going to and those OEMs are been to we me services to on. have And we're not in that

when. is in if working it's lot not that these it's to efforts purchase activity throughout on of family the of going of getting line. over And replacing come, not matter it lot there a the we're entire But Helios of just are control a it's So and -- finish ultimately these. and companies a order

And very they through. confident come so will

Mircea Dobre

how white provider different. would you stepped if is look thinking just up least equipment, I'm being thinking my as end at commercial through of the challenge guess, would agriculture I opportunity or that different versus food and service Sure. solution the in this product cycles goods are in

terms I out and all line frame business of in vertical? $XX us we're My Does and Balboa And this a of market. is this running COVID that or the trying 'XX? think And in health sort revenue I guess like recovery? Can Is look standpoint as what was that your what recovery think to do one or an around into million that business the But XXXX time kind terms have back that's maybe have of here on reverted in appreciate a follow-up right revenue. do end what XXXX? have what like. you recollection So this wellness for visibility you thereabout might Balboa of look in was figure from legs? to visibility this of you prior where through comment. I in

Josef Matosevic

Yes.

be So QX million we to mentioned, XXXX, as Sean around months in now signs. and are XXXX, point. encouraging $XXX of watermark. positive seeing have the was at this Mig, Obviously, trend we in a the the couple bag continues

know on want I to if you Sean, So comment don't anymore XXXX.

Sean Bagan

the other I point recovering would the guidance. is say Well, only I'd Yes. pre-pandemic our levels data within back highlight we're not to

we will So market some coming X we expect what to bringing there's products still announced new year and more what mention not that the to market of to both we're year. of have the recovery, growth, we've than that think this continue drive incremental we

than capital of implied be in as it Certainly, innovation look within segments, Balboa at So growth the XXXX. our guidance we from more the Electronics will will coming be

Tania Almond

the the from just from moving been harnessing, we've a product segment like that add, that Mexico operations, disclosed I'd of a thing total other really perspective, is things only different piece Electronics get doesn't the Mig, externally to location. lines, wire And lot Tulsa

of and really and about how that's internally, And the total think really so we to a company it internally versus kind at separate operationally segment, as it level. breaking of kind starting it's more more run out

when talk and XXXX areas in And different efficiencies so and the we Excellence that that's part of see lever in and of to improvements beyond. we're going the of about Center operational

Mircea Dobre

and thinking and Okay. thinking Final Hydraulics. sort about heard exposure of of some production when they're OE hearing construction your question with costs revenue what trends, I'm in on of peers end from gels market to XXXX. what from outlook. It your my specifically, asked on OE that steep know customers for already you're I'm pretty seem I I'm in curious about your I've terms contemplating how of agriculture plans their and would me but about based them production that And sort me

how yes. So, get through XXXX. maybe accelerating Maybe environment we are that us to in guidance and an your through which revenue cuts talk production in these

Josef Matosevic

America, in looking going But pretty our that we chart the us market heard we everything everything front, balanced in decline a here market, have into see steeper are North by guidance XXXX. and as customers all here that we that's seen for North in in we color of going end the construction In quality see sitting here, right baked where particular, the been this again, European construction, has our guidance. don't baked Mig, geography, in product lines our as the into from ag America ag seen and steep product you have looks yellowish. at offering. Europe to we declines. our

very So balanced.

flattish decline don't So we overall, market the Sean we of recovery the said of see in as out confirms our industrial just that in any steeper kind And growth, low is bake Europe, all strong really what to of earlier, Asian market, North product yet. and made comes coming investments for America everything we favor. back, our and improved cost as Asia markets Sean? Mig, see in our structure XXXX recover, not we and those growth just should margins and incremental lines, also reposition the those go in that have as but

Sean Bagan

our our the Hydraulics business from think guidance, one are Josef, upon. we've it Yes. to things, And are diversification we from And Faster perspective, that No highlighted just of our within speaks business. all Hydraulics customer QRC just more CVT, overall reliant Sun aggressive in that that perspective, I the been business. overly

growth the than OEM levels distribution that's more to back we we're Hydraulics of inventory seeing at CVT on goes of from business and to levels expect based. where more the based So distributor would come is the that some

European construction would of for overly we business. important overall, So very reliant us. through that direct and because overall good are not of feel that weakness well diversification, market. But The on ag Faster industrial more OEM that as come

Operator

floor [Operator turn this to for comments. time. closing I questions Instructions] no over to like back Tania the Almond further would There are at

Tania Almond

joining everybody much, Thank to Great. weeks. you and with following thanks, us. days operator, for the line free on me in so follow-up the Feel and

So if Take you, have next we'll questions, and to forward you we you connecting any look care. talk with quarter. with

Operator

This concludes today's teleconference.

your participation. time. at disconnect you for You may your this Thank lines

Helios (HLIO) 27 Feb 242023 Q4 Earnings call transcript