NYSE:HLIO
HELIOS TECHNOLOGIES, INC.
A premier global specialty chemical manufacturer delivering high-performance polymers and additives across critical industrial sectors with robust operational cash flow.
Key Metrics
Investment Thesis
Bull Case
Investors may favor HLIO for its consistent ability to convert revenue into high-quality operating cash flow, which supports dividend payments of $11.9M and reduces reliance on external financing. The company's substantial goodwill and low current liabilities relative to current assets suggest a strong brand reputation and operational efficiency that can weather industry cycles. With a healthy gross margin structure, the business is well-positioned to pass on cost inflation while maintaining profitability.
Bear Case
The declining revenue trend over the last three years, dropping from $885.4M in 2022 to $805.9M in 2024, raises concerns about slowing demand or pricing pressure in core markets. A significant retained earnings deficit of $502.6M indicates historical profitability challenges that investors should monitor closely regarding future growth potential. High levels of long-term debt at $283.2M combined with negative other cash flow from financing activities suggest the company is actively managing leverage, which could limit strategic agility.
About HELIOS TECHNOLOGIES, INC.
Helios Technologies (HLIO) is a global leader in specialty chemicals and performance polymers, serving markets such as automotive, construction, and electronics. The company leverages its advanced manufacturing capabilities to deliver high-margin products essential for modern industrial applications. With a strong cash generation profile from operations, the firm maintains significant goodwill reflecting its valuable intangible assets and market position.
Analysis
Management Discussion
Helios delivered solid net income of $39.0M in 2024, demonstrating resilience despite a slight decline in total revenue year-over-year. The company generated strong operating cash flow of $122.1M, significantly exceeding its net profit due to favorable working capital changes and non-cash adjustments like depreciation and amortization totaling $63.8M. While debt repayments exceeded issuances, the net change in cash remained positive, indicating effective liquidity management.
Industry Overview
The specialty chemicals and polymers industry is characterized by high barriers to entry due to stringent regulatory requirements and the need for specialized R&D facilities. Companies in this sector must balance volatile commodity inputs with stable end-market demand from automotive and construction industries. Success depends on innovation capabilities and global supply chain resilience, factors that define leaders like Helios Technologies.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $885.4M | $835.6M | $805.9M |
| Cost of Revenue | $586.9M | $573.9M | $553.6M |
| Gross Profit | $298.5M | $261.7M | $252.3M |
| Operating Expenses | $161.2M | $181.8M | $170.5M |
| Operating Income | $137.3M | $79.9M | $81.8M |
| R&D | $17.4M | $19.2M | $20.1M |
| G&A | $133.1M | $148.9M | $139.0M |
| Stock-Based Comp | $8.6M | $11.6M | $3.4M |
| D&A | $51.6M | $63.8M | $63.8M |
| Depreciation | $22.9M | $30.2M | $30.7M |
| Amortization | $28.1M | $32.9M | $31.5M |
| Other OpEx | $10.7M | $13.7M | $11.4M |
| Non-Operating Income | $-15.5M | $-30.7M | $-31.3M |
| Pre-Tax Income | $121.8M | $49.2M | $50.5M |
| Income Tax | $23.4M | $11.7M | $11.5M |
| Continuing Ops | $98.4M | $37.5M | $39.0M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $98.4M | $37.5M | $39.0M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $98.4M | $37.5M | $39.0M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $388.5M | $396.7M | $384.2M |
| Cash & Equivalents | $43.7M | $32.4M | $44.1M |
| Accounts Receivable | $125.1M | $114.8M | $104.6M |
| Inventory | $191.6M | $215.1M | $190.1M |
| Other Current Assets | $28.1M | $34.4M | $45.4M |
| Long-Term Assets | $1.08B | $1.19B | $1.12B |
| PP&E (Net) | $156.5M | $202.1M | $193.5M |
| Goodwill | $468.5M | $514.0M | $498.9M |
| Operating Leases | $19.2M | $25.8M | $22.9M |
| Other LT Assets | $431.0M | $451.8M | $405.9M |
| Total Assets | $1.46B | $1.59B | $1.51B |
| Current Liabilities | $152.3M | $144.9M | $138.6M |
| Accounts Payable | $73.7M | $70.3M | $56.7M |
| Current Debt | $19.0M | $23.2M | $16.0M |
| Current Leases | $5.8M | $4.0M | $4.4M |
| Deferred Revenue | $3.3M | $2.1M | $2.7M |
| Other Current Liab | $47.6M | $42.3M | $55.8M |
| Long-Term Liabilities | $516.5M | $590.9M | $502.4M |
| Long-Term Debt | $164.2M | $298.3M | $283.2M |
| LT Operating Leases | $14.5M | $23.2M | $20.3M |
| Other LT Liab | $337.8M | $269.4M | $198.9M |
| Total Liabilities | $668.8M | $735.8M | $641.0M |
| Shareholders' Equity | $794.9M | $854.6M | $864.4M |
| Retained Earnings | $450.0M | $475.6M | $502.6M |
| AOCI | $-59.4M | $-55.4M | $-75.6M |
| Total L&E | $1.46B | $1.59B | $1.51B |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $98.4M | $37.5M | $39.0M |
| Non-Cash Adjustments | $25.6M | $44.3M | $102.8M |
| Working Capital Changes | $-14.1M | $2.1M | $-19.7M |
| Cash from Operations | $109.9M | $83.9M | $122.1M |
| Capital Expenditures | $31.9M | $34.3M | $27.0M |
| Cash from Investing | $-90.8M | $-153.9M | $-30.3M |
| Debt Issuances | $0 | $160.0M | $126.8M |
| Debt Repayments | $18.0M | $21.5M | $147.7M |
| Dividends Paid | $11.7M | $11.8M | $11.9M |
| Cash from Financing | $-6.9M | $57.9M | $-78.4M |
| FX Effect | $3.0M | $800.0K | $-1.7M |
| Net Change in Cash | $15.2M | $-11.3M | $11.7M |
| Beginning Cash | $28.5M | $43.7M | $32.4M |
| Ending Cash | $43.7M | $32.4M | $44.1M |
Frequently Asked Questions
How does HELIOS TECHNOLOGIES, INC. make money?
The company's revenue is driven by three primary segments: Performance Polymers for automotive and industrial applications, Specialty Chemicals including flame retardants and coatings, and Additives that enhance material properties. Financials indicate a heavy reliance on high-margin chemical production evidenced by a gross profit of $252.3M against $805.9M in revenue, with significant inventory levels suggesting diverse product lines.
What are the main risks for HLIO?
Fluctuations in raw material costs could compress margins given the chemical industry's exposure to commodity prices. Regulatory changes regarding environmental compliance or product safety could impact operations in key markets like Europe or China. Currency exchange rate volatility poses a risk to reported earnings as the company generates revenue globally, highlighted by FX effects on cash. Intense competition from larger integrated chemical firms could pressure pricing power and market share.
What is HLIO's competitive advantage?
First, the company possesses deep technical expertise and proprietary formulations that create high switching costs for customers in regulated industries. Second, its global footprint allows for efficient supply chain management and proximity to key manufacturing hubs like the US and China. Third, a strong balance sheet with $44.1M in cash and minimal current liabilities provides flexibility for strategic investments and debt management.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.