Helios Technologies, Inc.

Greetings and welcome to the Helios Technologies first quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host. Tanya Almond, Investor Relations and Corporate Communications for Helios Technologies. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the Helios Technologies First Quarter 2021 Financial Results Conference Call. We issued a press release yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides there that will accompany our conversation today. On the line with me are Joseph Matasevich, our President and Chief Executive Officer, and Tricia Fulton, our Chief Financial Officer. They will spend the next several minutes reviewing our first quarter results, updating you on the execution of our augmented strategies, discussing our recently announced acquisition, updating our outlook for the rest of 2021, and then we will open the call to your questions. If you turn to slide two, you will find our Safe Harbor Statement. As you may be aware, we will make some forward-looking statements during this presentation and also during the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results that differ materially from where we are today. These risks and uncertainties and other factors will be provided in our 10Q to be filed with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. I'll also point out that during today's call, we will discuss some non-GAAP financial measures, which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. we have provided reconciliations of comparable GAAP with non-GAAP measures in the tables that accompany today's slides. With that, it's now my pleasure to turn the call over to Joseph.

Joseph DiCarlo- Tanya, thank you, and good morning, everyone. Please turn to slide three, and I will summarize our highlights for Q1. We have started 2021 on a very strong note with our first quarter exceeding our internal expectations. In fact, we had several records in the quarter as well. We had record sales in our electronics segment, supported by the outsized growth of Balboa, which we acquired in November of 2020, as well as Innovation Controls, which had its highest quarter since Q3 of 2018. Hydraulics also performed well as markets are recovering. In fact, our quick-release couplings business set a new sales record in the quarter, as the ag market is quite strong and construction equipment is also driving demand for our products. Additionally, our CVT business has returned to its best-in-class lead times. This combined with our top-tier technologies are driving market share gains. Continue to make great progress with the new customers we have targeted across both business segments to test our diversified market strategy with. Recently started working with another one, and our cross-functional teams are meeting along with engineering reviews and collaboration. Both hydraulics and electronics, we have started receiving orders from a number of these customers for new diversified applications. We are very pleased with how responsive the market has been in just a few quarters' worth of work, validating our strategy. This all delivered 58% top-line growth in the quarter. Thanks to the entire Helios family for all of the incredible hard work and dedication to produce such great results. Our operating and EBITDA margin improved nicely, despite the supply chain headwinds that the world is facing, including higher freight costs, raw material price increases, and shortages of electronic components. Gross profit reflects the changing mix in our product portfolio, but the significant operating leverage on higher volume expands operating income and margin. We generated approximately $15 million of cash from operations in the quarter, with 170% trailing 12-month cash conversion. With this cash, we will continue to deliver the balance sheet. And to top things off, we continue to execute well with our flywheel acquisition strategy with the definitive agreement we announced yesterday to acquire Shenzhen Joyner Way Electronics and Technology Company. They are a fast-growing developer of control panels, software, system, and accessories for the health and wellness industry. This transaction positions us to cost-effectively expand our electronic controls platform with more capabilities, strengthening our supply chain through broader geographic reach, and increases our manufacturing capacity to meet growing global demand with the opportunity to improve our margins over time. The facilities are located in the Silicon Valley of China and puts us at the heart of electronics and controls technology advancement in Asia. We could not be more pleased and look forward to welcoming the Jonah Wei colleagues to the Helios family. Giving our strong start to the year, we are raising our full year outlook, which we will review in more detail later in our remarks. On slide four and five, I will touch on some financial highlights for the quarter. Then Tricia will go into more detail during her prepared remarks. First quarter net sales grew to nearly 205 million in Balboa, which has been part of Helios for about five months, well exceeded our expectations. we were able to expand capacity and enhance productivity to capture the increased market demand. Our adjusted EBDA margin grew to 25.1% compared with last year, an increase of 160 basis points. Non-GAAP cash EPS of $0.99 or 77% annual growth reflects the better-than-expected performance of both segments. All in, the first quarter demonstrated a very solid performance by the entire company and was a direct result of the plans we put in place in the second half of last year with excellent execution by the Helios team against those plans. I will now turn the call over to Tricia to review the financial results and outlook in a little bit more detail. Tricia?