Q - HELIOS TECHNOLOGIES,

Previous wording

We operate under two business segments: Hydraulics and Electronics. The Hydraulics segment designs and manufactures hydraulic motion control and fluid conveyance technology products, including cartridge valves, manifolds, quick release couplings as well as engineers hydraulic solutions and in some cases complete systems. Our Hydraulics segment includes products sold under the Sun Hydraulics, Faster, Custom Fluidpower, Seungwon, NEM, Taimi, Daman and Schultes brands. The Electronics segment designs and manufactures customized electronic controls systems, displays, wire harnesses and software solutions for a variety of end markets including industrial and mobile, recreational and health and wellness. The Electronics segment includes products sold under the Enovation Controls, Murphy, Zero Off, HCT, Balboa Water Group and Joyonway brands.

Current wording

We operate under two business segments: Hydraulics and Electronics. The Hydraulics segment designs and manufactures hydraulic motion control and fluid conveyance technology products, including cartridge valves, manifolds, quick release couplings as well as engineers hydraulic solutions and in some cases complete systems. Our Hydraulics segment includes products sold under the Sun Hydraulics, Faster, Custom Fluidpower, NEM, Taimi, Daman and Schultes brands. The Electronics segment designs and manufactures customized electronic controls systems, displays, wire harnesses and software solutions for a variety of end markets including industrial and mobile, recreational and health and wellness. The Electronics segment includes products sold under the Enovation Controls, Murphy, Zero Off, HCT, Balboa Water Group and Joyonway brands.

Previous wording

Our previously announced restructuring activities within our Hydraulics segment related to the creation of our two new Regional Operational Centers of Excellence ("CoE") are complete. The Hydraulic Manifold Solutions CoE, located in Mishawaka, Indiana, is now doing the manifold machining and integrated package assembly for Sun Hydraulics, Faster Inc., and Daman. The Hydraulic Valve and Coupling Solutions CoE, located in Sarasota, Florida, is manufacturing and assembling cartridge valve technology and quick release couplings. We also continue to add capabilities and activities to our recently expanded Tijuana, Mexico facility to support our Electronics segment. Initial efforts have focused on circuit board assembly and wire harness production. While activities are currently paused, we continue to evaluate plans to move additional production activities to Tijuana in 2025.

Current wording

Our previously announced restructuring activities within our Hydraulics segment related to the creation of our two new Regional Operational Centers of Excellence ("CoE") are complete. The Hydraulic Manifold Solutions CoE, located in Mishawaka, Indiana, is now doing the manifold machining and integrated package assembly for Sun Hydraulics, Faster Inc., and Daman. The Hydraulic Valve and Coupling Solutions CoE, located in Sarasota, Florida, is manufacturing and assembling cartridge valve technology and quick release couplings. We also continue to add capabilities and activities to our recently expanded Tijuana, Mexico facility to support our Electronics segment. Initial efforts have focused on circuit board assembly and wire harness production. We paused activities as a result of the changing tariff landscape but continue to evaluate plans to move additional production activities to Tijuana in the second half of 2025.

Previous wording

In January 2025, the Company began the early phases of restructuring the Helios Center of Engineering Excellence (“HCEE”). As the next phases of the restructuring plan begin, management plans to close the San Antonio office during the second quarter of 2025, reassign resources to the operations at our other major facilities across the business, and eliminate certain positions. All substantial activities are planned to be moved out of San Antonio during the second quarter of 2025, with $0.1 of tangible assets being transitioned to other facilities throughout 2025. As a result of this planned change in the HCEE business operations, the workforce intangible asset associated with the HCEE acquisition was reviewed by management and it was determined that the remaining net book value of the asset should be accelerated and amortized over a useful life ending June 2025. This resulted in an increase $0.5 amortization expense in the three months ending March 29, 2025.

Current wording

In January 2025, the Company began the early phases of restructuring the Helios Center of Engineering Excellence (“HCEE”). Consistent with the Company's previously announced restructuring plan, during the end of the second quarter 2025, management ceased operations at the San Antonio office and reassigned resources to the operations at our other major facilities across the business, and eliminated certain positions. As a result of this planned change in the HCEE business operations, the workforce intangible asset associated with the HCEE acquisition was reviewed by management and it was determined that the remaining net book value of the asset should be accelerated and amortized over a useful life ending June 2025. This resulted in an increase $0.3 and $0.8 of amortization expense in the three and six months ending June 28, 2025, respectively.

Previous wording

Restructuring costs totaled $0.3 and $1.4, for the three months ended March 29, 2025 and March 30, 2024.

Current wording

Restructuring costs totaled $1.2 and $3.2, for the three months ended June 28, 2025 and June 29, 2024.

Previous wording

We expect the challenging macroeconomic conditions to continue, characterized by economic uncertainty and market disruption driven inflationary pressures, political uncertainty, potential changes to current global trade policies and modifications of existing trade agreements, the potential negotiation of new trade agreements and imposition of new (and retaliatory) tariffs, including the recently announced and potentially contemplated tariffs by the U.S. presidential administration, the ongoing Russia-Ukraine war and the Israel-Hamas war. We are continuously monitoring these economic and geopolitical conditions and remain focused on liquidity management, pricing discipline, cost savings initiatives and production efficiency as ways to mitigate the risks associated with the uncertainty.

Current wording

We expect the challenging macroeconomic conditions to continue, characterized by economic uncertainty and market disruption driven inflationary pressures, political uncertainty, potential changes to current global trade policies and modifications of existing trade agreements, the potential negotiation of new trade agreements and imposition of new (and retaliatory) tariffs, and the ongoing geopolitical conflicts in Ukraine and the Middle East. We are continuously monitoring these economic and geopolitical conditions and remain focused on liquidity management, pricing discipline, cost savings initiatives and production efficiency as ways to mitigate the risks associated with the uncertainty.

Previous wording

During and subsequent to the first quarter of 2025, additional tariffs were imposed on goods imported into the U.S. from China, Mexico and Canada, tariffs on steel and aluminum were increased and a reciprocal tariff on all other countries was imposed. Except for a slight uptick in sales from customers purchasing ahead of potential retaliatory tariffs at the end of the quarter, these additional tariffs did not have a material impact on our financial results for the three months ended March 29, 2025.

Current wording

During the first half of 2025, additional tariffs were imposed on goods imported into the U.S. from China, Mexico and Canada, tariffs on steel and aluminum were increased and various reciprocal tariffs were also imposed. These costs are reflected in the cost of sales on our Consolidated Statement of Operations.

Previous wording

We import goods into the U.S. primarily from Mexico, Italy and China. Based on the tariffs in effect as of the date of this Form 10-Q, many of these goods are exempt from the recent tariffs imposed. Due to the dynamic tariff environment, it is not possible to predict if these exemptions will remain in place, or if tariff rates imposed will change. Tariffs on product we import from China represent the greatest exposure, as some of those products imported are subject to tariffs of up to 170% under the current structure.

Current wording

We import goods into the U.S. primarily from Mexico, Italy and China. Based on the tariffs in effect as of the date of this Form 10-Q, many of these goods are exempt from the recent tariffs imposed. Due to the dynamic tariff environment, it is not possible to predict if these exemptions will remain in place, or if tariff rates imposed will change. Tariffs on product we import from China represent the greatest exposure, as some of those products imported are subject to tariffs of up to 55% under the current structure.

Previous wording

We export products from our U.S. locations to more than 40 countries. Our total U.S. exports were approximately $28.3 or 14.5% of total sales in the three months ended March 29, 2025, of which exports to China were $6.8 or 3.5% of total sales in the period. Based on the tariffs in effect as of the date of the filing, products we export to China from the U.S. are subject to tariffs up to 125%. Trade relations between the U.S. and other countries are fluid and we are unable to predict if tariffs imposed by other countries on our U.S. exports will change in the future, especially given the recent trend of retaliatory tariffs by several countries, including China.

Current wording

We export products from our U.S. locations to more than 40 countries. Our total U.S. exports were approximately $29.5 or 13.9% of total sales in the three months ended June 28, 2025, of which exports to China were $3.4 or 1.6% of total sales in the period. For the six months ended June 28, 2025, our total U.S. exports were approximately $57.8 or 14.2% of total sales, of which exports to China were $10.3 or 2.5% of total sales. Based on the tariffs in effect as of the date of this Form 10-Q, products we export to China from the U.S. are subject to tariffs up to 10%. Trade relations between the U.S. and other countries are fluid and we are unable to predict if tariffs (including retaliatory tariffs) imposed by other countries on our U.S. exports will change in the future.

Previous wording

According to the National Fluid Power Association (the fluid power industry’s trade association in the U.S.), the U.S. index of shipments of hydraulic products decreased 16% during the first three months of 2025 compared to the first three months of the prior year while the U.S. index of orders of hydraulic products declined 12% during the same period. In Europe, the CEMA Business Barometer reported in March 2025 that the general business climate index for the European agricultural machinery industry has improved with both the current business sentiment and expectations for turnover in the next six months trending upward in Q1. The CEMA Barometer report also indicated that the improvement was reflected for most European markets with Poland, Spain and Italy leading the European market ranking. The CECE (Committee for European Construction Equipment) March report noted that the business climate was flat for the month after reporting four consecutive months of improvement in February. The order intake remains in line with prior years for both European and international markets, signaling that sales may be nearing their trough. Concerns about the general economic climate was the number one reported limiting factor while the uncertain tariff situation in the U.S. was reported to have caused evaluations of the North American market to deteriorate.

Current wording

According to the National Fluid Power Association (the fluid power industry’s trade association in the U.S.), the U.S. index of shipments of hydraulic products decreased 9% during the first six months of 2025 compared to the first six months of the prior year while the U.S. index of orders of hydraulic products declined 3% during the same period. In Europe, the CEMA (European Agricultural Machinery Association) Business Barometer reported in June 2025 that the general business climate index for the European agricultural machinery industry has dropped slightly after continuous rises over the last months. Both the current business sentiment and expectations for turnover in the next six months, however, trended upward in the second quarter. The report also indicated that the confidence index remains low for France and Germany, especially when broken into the larger segments of tractors, arable and harvesting equipment, while improvement was reflected for other important markets with Poland, Spain and UK leading the European market ranking. The CECE (Committee for European Construction Equipment) June report noted that the business climate went down for the month as future expectations suffered a setback but remain positive on average across European markets for the next six months. Expectations for India and China went down while North America was a bit more optimistic. The report also indicated European sales grew in June over the prior year period, the first month of growth in the past twenty-three months. The order intake continued to trend upward in European markets but international markets seem to be losing momentum despite just having entered into growth territory.

Previous wording

The Federal Reserve’s Industrial Production Index, which measures the real output of all relevant establishments located in the U.S., reports first quarter 2025 output of semiconductors and other electronics components increased from the fourth quarter 2024, the fourth sequential quarterly increase. The Institute of Printed Circuits Association (“IPC”) reported that total North American printed circuit board (“PCB”) shipments were down 3.1% in March after being up 11.3% in February and up 19.9% in January compared with the same months last year. PCB bookings in 2025 were flat in March compared to the prior year but are higher 19.3% for the first three months of the year after strong bookings in January and February. The book to bill ratio, calculated as the value of orders booked over the past three months divided by the value of sales in the same period, was above 1.2 for each month, indicating a strong demand environment to start the year. The IPC also reported that North American electronics manufacturing services (“EMS”) shipments were relatively flat in the first three months compared to the prior year. EMS bookings were up 12.7% in March year over year after being down 3.6% in February and 1.2% in January, with the sentiment buyers were accelerating orders to get ahead of potential tariffs. IPC also indicated that the electronics industry demand index strengthened to its highest level in nearly a year in March, indicating an expansion in manufacturing activity. Electronics manufacturers did express concern about U.S. trade policies and the potential impacts to the overall economy and their business operations however.

Current wording

The Federal Reserve’s Industrial Production Index, which measures the real output of all relevant establishments located in the U.S., reports second quarter 2025 output of semiconductors and other electronics components increased from the fourth quarter 2024, the fifth sequential quarterly increase. The Institute of Printed Circuits Association (“IPC”) reported that total North American printed circuit board (“PCB”) shipments were down 8.6% in June after being up 21.4% in May and down 6.8% in April compared with the same months last year. PCB bookings in 2025 were up 4.9% in June compared to the prior year, with bookings for the first six months of the year higher by 16.2%. The book to bill ratio, calculated as the value of orders booked over the past three months divided by the value of sales in the same period, was above 1.1 for each month, indicating the stronger demand environment that started the year continues. The IPC also reported that North American electronics manufacturing services (“EMS”) shipments were up 3.0% in June compared to the prior year. EMS bookings decreased 8.9% in June year over year after being up 5.0% in May and down 10.0% in April, highlighting the sector's choppiness in the quarter.

Previous wording

On January 6, 2025, the Company announced that the Board of Directors ("Board") promoted Sean Bagan to President and Chief Executive Officer of the Company, effective January 6, 2025. The Board subsequently nominated Mr. Bagan for election to the Board at the 2025 Annual Meeting. Mr. Bagan also continues to serve as Chief Financial Officer while the Company conducts a search process, which will include internal and external candidates, to identify a permanent Chief Financial Officer to backfill his previous role. In connection with Mr. Bagan’s appointment, Chairman Philippe Lemaitre, serving as Executive Chairman, resumed his role as Non-Executive Chairman.

Current wording

On January 6, 2025, the Company announced that the Board of Directors ("Board") promoted Sean Bagan to President and Chief Executive Officer of the Company, effective January 6, 2025. The Board subsequently nominated Mr. Bagan for election to the Board at the 2025 Annual Meeting of Shareholders. Mr. Bagan also continues to serve as Chief Financial Officer while the Company conducts a search process, which will include internal and external candidates, to identify a permanent Chief Financial Officer to backfill his previous role. In connection with Mr. Bagan’s appointment, Chairman Philippe Lemaitre, serving as Executive Chairman, resumed his role as Non-Executive Chairman.

Previous wording

On March 13, 2025, Mr. Lemaitre notified the Company of his decision to retire and not seek re-nomination at the 2025 Annual Meeting. He had served on Helios’ Board since 2007 and as Chair since 2013. On March 13, 2025, the Board of the Company elected Laura Dempsey Brown to serve as the new Non-Executive Chair of the Company, effective March 13, 2025.

Current wording

On March 13, 2025, Mr. Lemaitre notified the Company of his decision to retire and not seek re-nomination at the 2025 Annual Meeting of Shareholders. He had served on Helios’ Board since 2007 and as Chair since 2013. On March 13, 2025, the Board of the Company elected Laura Dempsey Brown to serve as the new Non-Executive Chair of the Company, effective March 13, 2025.

Previous wording

2025 First Quarter Results and Comparison of the Three Months Ended March 29, 2025, and March 30, 2024

Current wording

2025 Second Quarter Results and Comparison of the Three Months Ended June 28, 2025, and June 29, 2024

Previous wording

The following is a discussion of our first quarter of 2025 results of operations and liquidity and capital resources. Comparisons are with the corresponding reporting period of 2024, unless otherwise noted.

Current wording

The following is a discussion of our second quarter of 2025 results of operations and liquidity and capital resources. Comparisons are with the corresponding reporting period of 2024, unless otherwise noted.

Previous wording

Compared to the prior year, sales in the first quarter were negatively impacted by reduced demand for products in our agriculture, mobile and industrial end markets, offset partially by an increase to the health and wellness end market. Sales in the recreational end market were relatively flat. Sales were down in all regions during the first quarter compared to the prior year.

Current wording

Second quarter sales were negatively impacted by reduced demand in our recreational, industrial and mobile end markets. Sales in the agriculture end market were flat compared to the prior year period, an improvement from year over year declines in the prior five quarters. Sales for the year-to-date period were negatively impacted by reduced demand for products in our mobile, industrial, agriculture and recreational end markets, offset partially by an increase in the health and wellness end market. Sales were up in the EMEA region driven by stronger demand for our QRC products, while sales were down in the Americas and APAC regions during the second quarter compared to the prior year period. Sales in all regions were down in the year-to-date period compared to the prior year.

Previous wording

First quarter gross profit decreased $7.3, 10.9%, below the prior year first quarter primarily from the impact of lower volume and higher material costs as a percentage of sales, partially offset by lower labor and overhead costs. Changes in foreign currency had an unfavorable impact of $0.6. Gross margin decreased by 110 basis points as the impact of lower fixed costs leverage on lower volume and higher material costs more than offset reductions in labor and overhead.

Current wording

Second quarter gross profit decreased $3.1, 4.4%, below the prior year second quarter primarily from the impact of lower volume, higher material costs as a percentage of sales, and net tariff impacts partially offset by lower labor and overhead costs. Gross margin decreased by 30 basis points as the impact of lower fixed costs leverage on lower volume and higher material costs more than offset reductions in labor and overhead.

Previous wording

First quarter operating income as a percentage of sales decreased 90 basis points to 8.7%. The decrease is due to the gross margin level changes partially offset by lower operating expenses as a percentage of revenue, primarily from lower payroll and benefit costs, compared with the prior year period.

Current wording

Year-to-date operating income as a percentage of sales decreased 110 basis points to 9.6%. The decrease is due to the gross margin level changes and higher operating expenses as a percentage of revenue, primarily from higher amortization related to the HCEE accelerated intangible amortization as a result of restructuring activities, compared with the prior year period.

Previous wording

Net interest expense decreased by $0.8 to $7.4 in the first quarter of 2025. The prior year period interest expense benefited $1.8 from a recognized gain on an interest rate swap agreement. Excluding the impact of the interest rate swap agreement, interest expense was lower by $2.6 due to carrying a lower debt balance throughout the period and lower average interest rates. Average net debt decreased to $402.6 during the first quarter of 2025 compared with $448.9 during the first quarter of 2024. The reduction in average net debt is due to the paying down of debt incurred from prior year acquisitions.

Current wording

Net interest expense decreased by $1.5 to $7.0 in the second quarter of 2025 primarily due to lower debt outstanding compared to the prior year period. Average net debt decreased to $391.4 during the second quarter of 2025 compared with $470.9 during the second quarter of 2024. The reduction in average net debt is due to the paying down of debt incurred from prior year acquisitions. Year to date interest expense totaled $14.4, a decrease of $2.3. The prior year period interest expense benefited $1.8 from a recognized gain on an interest rate swap agreement. Excluding the impact of the interest rate swap agreement, interest expense was lower by $4.1 due to carrying a lower debt balance throughout the period and lower average interest rates. Average net debt for the year-to-date period decreased to $394.3 compared with $484.6 during the prior-year period.

Previous wording

The provision for income taxes for the first quarter of 2025 was 23.5% of pretax income compared to 23.2% for the prior-year first quarter. These effective rates fluctuate relative to the levels of income and different tax rates in effect among the countries in which we sell our products.

Current wording

The provision for income taxes for the second quarter of 2025 was 23.8% of pretax income compared to 23.0% for the prior-year second quarter. The year-to-date provision was 23.7% and 23.1% of pretax income for 2025 and 2024, respectively. These effective rates fluctuate relative to the levels of income and different tax rates in effect among the countries in which we sell our products.

Previous wording

The company is continuing to evaluate the impact of Pillar Two legislation and the availability of transitional safe harbors. Based on its current assessment, the Company does not expect the implementation of Pillar Two to have a material impact on its consolidated effective tax rate for 2025. However, the Company will continue to monitor legislation developments and refine its analysis as additional guidance becomes available.

Current wording

The Company continues to evaluate the impact of Pillar Two legislation and application of safe harbors. Based on its current assessment, the Company does not expect the implementation of Pillar Two to have a material impact on its consolidated effective tax rate for 2025.

Previous wording

First quarter net sales for the Hydraulics segment decreased by $16.0, 11.2%, compared with the prior year first quarter. The decline in sales in the first quarter was driven by softness across all end markets, most predominantly in the agriculture and mobile end markets. Changes in foreign currency exchange rates had an unfavorable impact of $2.2, 1.5%.

Current wording

Year-to-date net sales for the Hydraulics segment decreased by $20.8, 7.2%, compared with the prior year period. The decline in sales was driven by softness across all end markets, most predominantly in the agriculture, mobile and industrial end markets. Changes in foreign currency exchange rates had an unfavorable impact of $0.6, 0.2%.

Previous wording

Regional sales performance in the first quarter compared to the prior year quarter was driven by:

Current wording

Regional sales performance in the second quarter compared to the prior year quarter was driven by:

Previous wording

Americas - sales declined $5.9, 10.6%, primarily from generally softer demand in the region.

Current wording

Americas - sales declined $5.3, 8.9%, primarily from generally softer demand in the region.

Previous wording

EMEA - excluding favorable changes in foreign currency rates of $1.0, sales declined $6.6, 14.5%, primarily driven by softness in the agriculture end market.

Current wording

EMEA - excluding favorable changes in foreign currency rates of $1.0, sales decreased $5.3, 6.0%, primarily driven by softness in the agriculture end market.

Previous wording

APAC - excluding favorable changes in foreign currency rates of $1.0, sales increased $1.5, 3.6%, with decreased demand in China, Japan, Korea and India.

Current wording

APAC - excluding unfavorable changes in foreign currency rates of $1.4, sales decreased $3.9, 4.6%, with decreased demand in China, Korea and India.

Previous wording

Operating income as a percentage of sales decreased 150 basis points to 13.8% in the first quarter of 2025 due to the gross margin decline partially offset by lower operating expenses. SEA expenses went down by $2.7, mainly due to lower labor and benefit costs.

Current wording

Operating income as a percentage of sales increased 130 basis points to 17.7% in the second quarter of 2025 due to the gross margin increase partially offset by higher operating expenses. SEA expenses went up by $0.5, mainly due to higher labor and benefit costs. R&D expenses went up by $0.1.

Previous wording

First quarter net sales for the Electronics segment decreased $0.5, 0.7%, compared with the prior year first quarter. Compared to the prior year period, first quarter sales in the health and wellness and recreational end markets increased slightly, while sales to the industrial, and mobile end markets decreased. Changes in foreign currency exchange rates had minimal impact.

Current wording

Second quarter net sales for the Electronics segment decreased $2.6, 3.5%, compared with the prior year second quarter. Compared to the prior year period, second quarter sales in the industrial end market increased slightly, while sales to the recreational and agriculture end markets decreased. Sales to the mobile end market were relatively flat. Changes in foreign currency exchange rates had minimal impact.

Previous wording

Sales were flat to down across end markets in the Americas region compared to the prior year period, while higher sales in health and wellness were offset by year over year declines in other end markets in the EMEA region. APAC sales increased over the comparable period in APAC driven by the health and wellness end market.

Current wording

Sales decreased across most end markets in the Americas region, while higher sales in health and wellness were offset by year over year declines in other end markets in the EMEA region in the second quarter and year-to-date period. APAC sales increased over the comparable second quarter and year-to-date period in APAC driven by the health and wellness end market.

Previous wording

Certain costs are excluded from business segment results as they are not used in evaluating the results of, or in allocating resources to, our operating segments. For the first quarter of 2025, these costs totaled $8.4 for: amortization of acquisition-related intangible assets of $8.3 and $0.1 for officer transition costs. Compared to the first quarter of 2024, these costs remained primarily flat.

Current wording

Certain costs are excluded from business segment results as they are not used in evaluating the results of, or in allocating resources to, our operating segments. For the second quarter of 2025, these costs totaled $9.0 for amortization of acquisition-related intangible assets of $8.3, $0.4 for officer transition costs and $0.3 for activities related to the plan to sell CFP. Compared to the first quarter of 2024, these costs increased by $0.8, primary due to higher amortization related to the HCEE accelerated intangible amortization as a result of restructuring activities and officer transition costs. Year-to-date, corporate and other costs totaled $17.4 for amortization of acquisition related intangible assets of $16.5, $0.5 related to officer transition costs and $0.4 for activities related to the sale of CFP. This compared to $16.7 in the 2024 year-to-date period that included amortization of acquisition related intangible assets of $15.7, $0.5 related to our acquisition and integration activities and $0.5 for officer transition costs.

Previous wording

Historically, our primary source of capital has been cash generated from operations. We also use borrowings on our credit facilities to fund acquisitions. During the first three months of 2025, cash provided by operating activities totaled $19.0. At the end of the first quarter, we had $45.9 of available cash and cash equivalents on hand and $352.6 of available credit on our revolving credit facilities. We also have a $400.0 accordion feature available under our Third Amended and Restated Credit Agreement, subject to certain pro forma compliance requirements, intended to support potential future acquisitions.

Current wording

Historically, our primary source of capital has been cash generated from operations. We also use borrowings on our credit facilities to fund acquisitions. During the first six months of 2025, cash provided by operating activities totaled $56.0. At the end of the second quarter, we had $53.0 of available cash and cash equivalents on hand and $358.6 of available credit on our revolving credit facilities. We also have a $400.0 accordion feature available under our Third Amended and Restated Credit Agreement, subject to certain pro forma compliance requirements, intended to support potential future acquisitions.

Previous wording

Our principal uses of cash are operating expenses, capital expenditures, servicing debt, acquisition-related payments and dividends to shareholders.

Current wording

Our principal uses of cash are operating expenses, capital expenditures, servicing debt, acquisition-related payments, dividends to shareholders, and share repurchases.

Previous wording

We believe that cash generated from operations and our borrowing availability under our credit facilities will be sufficient to satisfy our operating expenses for the foreseeable future. In the event that economic conditions were to severely worsen for a protracted period of time, we would have several options available to ensure liquidity in addition to increased borrowings. Capital expenditures could be postponed since they primarily pertain to long-term improvements in operations, operating expense reductions could be made, acquisition activity could be delayed and finally, the dividend to shareholders could be reduced or suspended.

Current wording

We believe that cash generated from operations and our borrowing availability under our credit facilities will be sufficient to satisfy our operating expenses for the foreseeable future. In the event that economic conditions were to severely worsen for a protracted period of time, we would have several options available to ensure liquidity in addition to increased borrowings. Capital expenditures could be postponed since they primarily pertain to long-term improvements in operations, operating expense reductions could be made, acquisition activity could be delayed and finally, the dividend to shareholders as well as share repurchases could be reduced or suspended.

Previous wording

Cash on hand increased $1.8 in the first quarter of 2025 to $45.9 as of March 29, 2025. Changes in exchange rates during the three months ended March 29, 2025, positively impacted cash and cash equivalents $0.9. Cash balances on hand are a result of our cash management strategy, which focuses on maintaining sufficient cash to fund operations while reinvesting cash in the Company and paying down borrowings on our credit facilities.

Current wording

Cash on hand increased $8.9 in the first two quarters of 2025 to $53.0 as of June 28, 2025. Changes in exchange rates during the six months ended June 28, 2025, positively impacted cash and cash equivalents $4.6. Cash balances on hand are a result of our cash management strategy, which focuses on maintaining sufficient cash to fund operations while reinvesting cash in the Company and paying down borrowings on our credit facilities.

Previous wording

Year-to-date cash from operations increased by $1.2 to $19.0. Cash earnings (calculated as net income plus adjustments to reconcile net income to net cash provided by operating activities, excluding changes in net operating assets and liabilities) decreased by $3.0 in the first quarter of 2025 compared to the same period in 2024. Changes in net operating assets and liabilities improved cash flow by $4.2 in the first quarter, compared to the prior year period, primarily from $4.8 of insurance proceeds received for losses the Company incurred due to a fire and a weather-related incident at one of its manufacturing facilities in Italy in the third quarter of 2023 and from days payable outstanding optimization, partially and offset by an increase in accounts receivable, accrued expenses and other liabilities. Changes in inventory increased cash by $1.1 in comparison to reduction of cash by $0.7 in the first quarter of 2025 and 2024, respectively. Days of inventory on hand decreased to 126 days as of March 29, 2025, compared with 135 days as of March 30, 2024. Changes in accounts receivable reduced cash by $15.3 and $13.1 in the first quarter of 2025 and 2024, respectively. Days sales outstanding increased slightly to 56 days as of March 29, 2025, compared with 54 days as of March 30, 2024. Changes in accounts payable increased cash by $4.8 in comparison to a reduction of cash of $1.8 in 2025 and 2024, respectively. Days payables outstanding for the 2025 year decreased to 41 days from 43 days during 2024.

Current wording

Year-to-date cash from operations increased by $4.4 to $56.0. Cash earnings (calculated as net income plus adjustments to reconcile net income to net cash provided by operating activities, excluding changes in net operating assets and liabilities) decreased by $8.3 in the first two quarters of 2025 compared to the same period in 2024. Changes in net operating assets and liabilities improved cash flow by $12.7 in the second quarter, compared to the prior year period, primarily from days payable outstanding optimization, partially and offset by an increase in accounts receivable and inventory. Changes in inventory decreased cash by $1.7 in comparison to an increase of cash by $6.3 in the first two quarters of 2025 and 2024, respectively. Days of inventory on hand decreased to 122 days as of June 28, 2025, compared with 128 days as of June 29, 2024. Changes in accounts receivable reduced cash by $23.4 and $19.5 in the first two quarters of 2025 and 2024, respectively. Days sales outstanding increased slightly to 57 days as of June 28, 2025, compared with 55 days as of June 29, 2024. Changes in accounts payable increased cash by $21.4 in comparison to a reduction of cash of $1.9 in 2025 and 2024, respectively. Days payables outstanding for the 2025 year increased to 50 days from 41 days during 2024.

Previous wording

Cash used in investing activities totaled $6.8 in the first quarter of 2025, compared to $6.3 in the first quarter of the prior year. The relatively flat year-over-year figures reflect our disciplined approach to capital allocation and continued focus on strategic investment priorities.

Current wording

Cash used in investing activities totaled $13.2 in the first two quarters of 2025, compared to $15.4 in the first two quarters of the prior year. The year-over-year decline reflects our disciplined approach to capital allocation and continued focus on strategic investment priorities.

Previous wording

Capital expenditures totaled $6.1, 3.1%, of sales for the first quarter of 2025, an increase of $0.6 over the prior year comparable period. Capital expenditures for 2025 are forecasted to be approximately 3%-4% of sales, for investments in machinery and equipment, improvements to manufacturing technology and maintaining or replacing existing machine capabilities.

Current wording

Capital expenditures totaled $11.5, 2.8%, of sales for the first two quarters of 2025, a decrease of $2.1 over the prior year comparable period. Capital expenditures for 2025 are forecasted to be approximately 3.25% to 3.50% of sales, for investments in machinery and equipment, improvements to manufacturing technology and maintaining or replacing existing machine capabilities.

Previous wording

Net cash used in financing activities totaled $11.3 during the first quarter of 2025, compared to $5.4 in the same period of the prior year. In the first quarter of 2025, repayments, net of borrowings, totaled $7.8 compared to $0.7 in the first quarter of 2024.

Current wording

Net cash used in financing activities totaled $38.5 during the first two quarters of 2025, compared to $22.6 in the same period of the prior year. In the first two quarters of 2025, repayments, net of borrowings, totaled $25.6 compared to $18.2 in the first two quarters of 2024.

Previous wording

Borrowings on our term loans and revolving credit facilities as of March 29, 2025, totaled $296.4 and $150.3, respectively. See Note 8 of the Notes to the Consolidated Financial Statements included in this Quarterly Report for additional information regarding our credit facilities.

Current wording

Borrowings on our term loans and revolving credit facilities as of June 28, 2025, totaled $291.9 and $144.3, respectively. See Note 9 of the Notes to the Consolidated Financial Statements included in this Quarterly Report for additional information regarding our credit facilities.

Previous wording

During the first quarter of 2025, we declared a quarterly cash dividend of $0.09 per share payable on April 22, 2025, to shareholders of record as of April 4, 2025. The declaration and payment of future dividends is subject to the sole discretion of the Board, and any determination as to the payment of future dividends will depend upon our profitability, financial condition, capital needs, future prospects and other factors deemed pertinent by the Board.

Current wording

During the second quarter of 2025, we declared a quarterly cash dividend of $0.09 per share payable on July 21, 2025, to shareholders of record as of July 7, 2025. The declaration and payment of future dividends is subject to the sole discretion of the Board, and any determination as to the payment of future dividends will depend upon our profitability, financial condition, capital needs, future prospects and other factors deemed pertinent by the Board.

Previous wording

On February 20, 2025, the Board approved a multi-year share repurchase program (the "Share Repurchase Program"), authorizing the Company to repurchase up to $100.0 of our outstanding common stock. The Company may purchase shares at management’s discretion from time to time in the open market, through privately negotiated transactions, through investment banking institutions or through other means in accordance with applicable federal securities laws, including Rule 10b5-1 trading plans. To the extent that the Company repurchases its shares, the amount and timing of any repurchases are subject to a variety of factors including, but not limited to, general business and market conditions, share price, regulatory and legal requirements and capital availability. The share repurchase program will be funded with cash on hand and cash generated from operations. As of March 29, 2025, no shares have been repurchased under the Share Repurchase Program.

Current wording

On February 20, 2025, the Board approved a multi-year share repurchase program (the "Share Repurchase Program"), authorizing the Company to repurchase up to $100.0 of our outstanding common stock. The Company may purchase shares at management’s discretion from time to time in the open market, through privately negotiated transactions, through investment banking institutions or through other means in accordance with applicable federal securities laws, including Rule 10b5-1 trading plans. To the extent that the Company repurchases its shares, the amount and timing of any repurchases are subject to a variety of factors including, but not limited to, general business and market conditions, share price, regulatory and legal requirements and capital availability. The program does not obligate the Company to acquire a minimum number of shares. The share repurchase program will be funded with cash on hand and cash generated from operations. During the six months ended June 28, 2025, the Company repurchased 200,000 shares of its common stock for $6.5. As of June 28, 2025, the Company has $93.5 million of remaining availability to repurchase outstanding common stock under its Share Repurchase Program.