HELIOS TECHNOLOGIES, INC.
For the period ended Sep 27, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2025 · Filed Nov 4, 2025
HLIO$47.44-21.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-28; filed 2025-08-05.
0000950170-25-103231
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-27; filed 2025-11-04.
0001193125-25-264784
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 98 previous paragraphs and 100 current paragraphs.
43 unchanged; 45 reworded; 12 added; 7 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
On August 28, 2025, the Board, announced that Michael Connaway had been appointed to the corporate officer position of Executive Vice President, Chief Financial Officer, effective as of October 13. In connection with Mr. Connaway's appointment, Sean Bagan, President, Chief Executive Office, and Chief Financial Officer, will no longer hold the corporate officer position of Chief Financial Officer as of October 13.
Current report
On August 28, 2025, the Board also announced that Jeremy Evans had been appointed to the corporate officer position of Senior Vice President, Chief Accounting Officer and Corporate Controller, effective September 1, 2025.
Current report
Year-to-date gross profit increased $2.0, 1.0%, primarily from the impact of higher volume and lower direct labor costs, partially offset by higher material costs and the net impact of tariffs. Gross margin increased by 23 basis points as the impact of higher volume and lower labor more than offset higher material costs and the net impact of tariffs.
Current report
A reduction in the i3 projected profit contributions to the Company over the short and mid-term due to de-emphasizing i3 sales that do not align with the Company's core business led to an impairment charge of $25.9 million of goodwill at our i3 reporting unit, a component within our Electronics segment. This is the primary driver of the decrease in operating income as a percentage of sales in both the third quarter and year to date periods compared to the prior year.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. While we expect certain provisions of the OBBBA to change the timing of cash payments in the current fiscal year and future periods, we do not expect the legislation to have a material impact on our consolidated financial statements.
Current report
Third quarter net sales for the Hydraulics segment increased by $11.9, 9.2%, compared with the prior year third quarter. The increase in sales in the third quarter was driven by improved demand in the mobile and agriculture end markets, partially offset by softness in the industrial end market. Changes in foreign currency exchange rates had a favorable impact of $1.8, 1.4%.
Current report
Americas - sales increased $1.6, 3.1%, primarily from stronger demand for our FCT products.
Current report
Third quarter gross profit increased $5.0, 12.2%, or 90 basis points, primarily due to better fixed cost leverage on higher volume and lower direct labor costs as a percentage of sales.
Current report
Operating income as a percentage of sales decreased 160 basis points to 17.1% in the third quarter of 2025 due to the gross margin level improvement being offset by higher operating expenses. Operating expenses were $5.1 higher than the year ago period, mainly due to higher wages and benefit costs. The prior year period included a $3.7 reversal of unvested stock compensation in connection with the officer transition in July 2024.
Current report
Year-to-date net sales for the Electronics segment increased $10.7, 5.1%, compared with the prior year period. All end markets increased with the largest increase coming from the recreational end market. Changes in foreign currency exchange rates had minimal impact.
Current report
Third quarter gross profit increased $7.5, 38.3% compared to the prior year third quarter, primarily due to higher volume. Gross margin improved 420 basis points, primarily due to the impact of higher fixed costs leverage on higher volume, lower direct labor costs as a percentage of sales and a favorable product mix.
Current report
Prior to the goodwill impairment charge in our i3PD reporting unit, operating income as a percentage of sales increased 490 basis points to 15.3% in the third quarter of 2025 compared to the prior year period due to the higher gross margin and lower operating expenses as a percentage of sales. The prior year period included a $1.8 reversal of unvested stock compensation in connection with the officer transition in July 2024.
Removed paragraphs (7)
Previous report
Year-to-date gross profit decreased $10.4, 7.5%, primarily from the impact of lower volume and higher material costs as a percentage of sales, partially offset by lower labor and overhead costs. Gross margin decreased by 70 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 report
As of June 28, 2025, the Company classified certain assets and liabilities of Guwing and CFP as held for sale in accordance with ASC 360. The related assets and liabilities are presented separately on the consolidated balance sheet as "Assets Held for Sale" and "Liabilities Held for Sale," respectively. The component remains reported in continuing operations as the planned sale does not represent a strategic shift under ASC 205-20. The Company evaluated the temporary differences between the book and tax basis of the disposal group and determined that the bases were substantially equal at the time of classification. Accordingly, no deferred tax asset or liability was recorded in connection with the held-for-sale classification.
Previous report
Second quarter net sales for the Hydraulics segment decreased by $4.8, 3.3%, compared with the prior year second quarter. The decline in sales in the second quarter was driven by softness across all end markets, most predominantly in the industrial and mobile end markets. Sales to the agriculture market was relatively flat with the prior year period. Changes in foreign currency exchange rates had a favorable impact of $1.5, 1.0%.
Previous report
Second quarter gross profit increased $1.6, 3.6%, or 220 basis points, primarily due to lower material and direct labor costs partially offset by lost leverage on lower volume and net tariff impacts.
Previous report
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 report
Year-to-date net sales for the Electronics segment decreased $3.1, 2.2%, compared with the prior year period. Strength in the health and wellness end market was offset by declines in the recreational, industrial and mobile end markets.
Previous report
Operating income as a percentage of sales decreased 570 basis points to 8.2% in the second quarter of 2025 compared to the prior year period due to the lower gross margin and higher amortization expense related to the HCEE accelerated intangible amortization as a result of restructuring activities. SEA expenses were flat and R&D expenses decreased $0.4 year over year.
Reworded paragraphs (45)
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. 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.
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 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.
Previous wording
The initial phase of the restructuring activities to better optimize our European regional operations are complete. This included transitioning some manufacturing of manifolds and integrated package assembly to our Roncolo, Italy location. To create capacity in Roncolo, we moved some turning and lathing operations from Roncolo to our Rivolta, Italy location. These activities included transferring equipment and operations between facilities. Additional phases of this project are currently paused, we continue to evaluate plans for restructuring activities to optimizing operations in the European Region.
Current wording
The initial phase of the restructuring activities to better optimize our European regional operations is complete. This included transitioning some manufacturing of manifolds and integrated package assembly to our Roncolo, Italy location. To create capacity in Roncolo, we moved some turning and lathing operations from Roncolo to our Rivolta, Italy location. These activities included transferring equipment and operations between facilities. Additional phases of this project are currently paused, we continue to evaluate plans for restructuring activities to optimizing operations in the European Region.
Previous 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.
Current wording
In January 2025, the Company began 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.
Previous wording
Restructuring costs totaled $1.2 and $3.2, for the three months ended June 28, 2025 and June 29, 2024.
Current wording
Restructuring costs totaled $1.4 and $4.4, for the nine months ended September 27, 2025 and September 28, 2024.
Previous 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.
Current wording
During the first three quarters of 2025, additional tariffs were imposed on goods imported into the U.S. from China, Mexico and Canada. In addition, 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 Statements of Operations.
Previous 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.
Current wording
We export products from our U.S. locations to more than 40 countries. Our total U.S. exports were approximately $35.8 or 16.2% of total sales in the three months ended September 27, 2025, of which exports to China were $2.2 or 1.0% of total sales in the period. For the nine months ended September 27, 2025, our total U.S. exports were approximately $93.6 or 14.9% of total sales, of which exports to China were $12.5 or 2.0% 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 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.
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 6% during the first nine months of 2025 compared to the first nine months of the prior year while the U.S. index of orders of hydraulic products increased 7% during the same period. In Europe, the CEMA (European Agricultural Machinery Association) Business Barometer reported in September 2025 that the general business climate index for the European agricultural machinery industry has improved since our second quarter in addition to expectations in the upcoming months due to positive assessments for both orders and sales. Both the current business sentiment and expectations for turnover in the next six months trended upward in the third quarter. The report also indicated that the confidence index remains low for France, Netherlands and UK, especially when broken into the larger segments of tractors and harvesting equipment, while improvement was reflected for other important markets with Spain and Italy leading the European market ranking.
Previous 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.
Current wording
The Federal Reserve’s Industrial Production Index, which measures the real output of all relevant establishments located in the U.S., reports third quarter 2025 output of semiconductors and other electronics components increased from the prior quarter, the sixth sequential quarterly increase. The Institute of Printed Circuits Association (“IPC”) reported that total North American printed circuit board (“PCB”) shipments were up 32% in September after being up 12.8% in August and up 20.7% in July compared with the same months last year. PCB bookings in 2025 were up 1.8% in September compared to the prior year, with bookings for the first nine months of the year were higher by 10.5%. 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 decreased 1.2% in September compared to the prior year. EMS bookings decreased 3.2% in September year over year after decreasing 4.3% in August and increasing 7.9% in July, 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 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.
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 continued to serve as Chief Financial Officer while the Company conducted a search process 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 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.
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 elected Laura Dempsey Brown to serve as the new Non-Executive Chair of the Board, effective March 13, 2025.
Previous wording
2025 Second Quarter Results and Comparison of the Three Months Ended June 28, 2025, and June 29, 2024
Current wording
2025 Third Quarter Results and Comparison of the Three Months Ended September 27, 2025, and September 28, 2024
Previous 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.
Current wording
The following is a discussion of our third 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
Second quarter consolidated net sales declined $7.4, 3.4%, below the prior-year second quarter. Changes in foreign currency exchange rates had a favorable impact to our second quarter sales of $1.6, 0.8%.
Current wording
Third quarter consolidated net sales increased $25.8, 13.3%, above the prior-year third quarter. Changes in foreign currency exchange rates had a favorable impact to our third quarter sales of $1.8, 0.9%.
Previous wording
Consolidated net sales for the year-to-date period were lower by $23.9, 5.5%. Changes in foreign currency exchange rates had an unfavorable impact to our year-to-date quarter sales of $0.7, 0.2%.
Current wording
Consolidated net sales for the year-to-date period were higher by $1.8, 0.3%. Changes in foreign currency exchange rates had a favorable impact to our year-to-date quarter sales of $1.1, 0.2%.
Previous 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.
Current wording
Third quarter sales were positively impacted by increased demand in our recreational, mobile and agriculture end markets. Sales in the agriculture end market were up compared to the prior year period, an improvement from year over year declines in the prior six quarters. Sales for the year-to-date period were positively impacted by increased demand for products in our recreational and mobile end markets, offset partially by a decrease in the industrial and agriculture end markets. Sales in the health and wellness end market were relatively flat in both the third quarter and year to date periods. Sales were up in all regions driven by stronger demand in both segments during the third quarter compared to the prior year period. Sales in the EMEA and APAC regions were up while sales in the Americas region were down in the year-to-date period compared to the prior year.
Previous 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.
Current wording
Third quarter gross profit increased $12.5, 20.7%, above the prior year third quarter primarily from the impact of higher volume and lower direct labor costs as a percentage of sales partially offset by net tariff impacts. Gross margin increased by 200 basis points as the impact of higher fixed costs leverage on higher volume and lower direct labor costs more than offset the impact of net tariffs.
Previous wording
Second quarter operating income as a percentage of sales decreased 150 basis points to 10.3%. The decrease is due to the gross margin level changes and higher operating expenses as a percentage of revenue, primarily from higher SEA expense and higher amortization related to the HCEE accelerated intangible amortization as a result of restructuring activities, compared with the prior year period. SEA expenses were $0.6 higher than the year ago period, mainly due to higher wages and benefit costs associated with the leadership change within the Electronics segment.
Current wording
Prior to the goodwill impairment charge, third quarter operating income as a percentage of sales increased 97 basis points to 12.4% compared with the prior year period. The increase is due to the gross margin level improvement partially offset by higher operating expenses. Operating expenses were $7.5 higher than the year ago period, mainly due to higher wages and benefit costs and costs associated with the Divestiture. The prior year period included a $5.5 reversal of unvested stock compensation in connection with the officer transition in July 2024.
Previous 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.
Current wording
Year-to-date operating income as a percentage of sales prior to the goodwill impairment charge compared with the prior year period decreased 51 basis points to 10.5%. The decrease is due to higher operating expenses as a percentage of revenue, primarily from higher wages and benefit costs and higher amortization related to the HCEE accelerated intangible amortization as a result of restructuring activities partially offset by the gross margin changes.
Previous 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.
Current wording
Net interest expense decreased by $2.1 to $6.9 in the third quarter of 2025 primarily due to lower debt outstanding compared to the prior year period. Average net debt decreased to $373.7 during the third quarter of 2025 compared with $447.2 during the third 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 $21.3, a decrease of $4.4. The prior year to date period interest expense benefited $3.6 from a recognized gain on an interest rate swap agreement. Excluding the impact of the interest rate swap agreement, interest expense was lower by $8.0 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 $384.8 compared with $464.6 during the prior-year period.
Previous 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.
Current wording
The provision for income taxes for the third quarter of 2025 was 19.8% of pretax income compared to 14.2% for the prior-year third quarter. The year-to-date provision was 22.3% and 20.3% 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 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.
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 it to have a material impact in 2025 to its effective tax rate.
Previous 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%.
Current wording
Year-to-date net sales for the Hydraulics segment decreased by $8.9, 2.1%, compared with the prior year period. The decline in sales was driven by softness in the industrial and agriculture end markets, partially offset by improved demand in the mobile end market. Changes in foreign currency exchange rates had an unfavorable impact of $1.1, 0.3%.
Previous wording
Regional sales performance in the second quarter compared to the prior year quarter was driven by:
Current wording
Regional sales performance in the third quarter compared to the prior year quarter was driven by:
Previous wording
EMEA - excluding favorable changes in foreign currency rates of $2.0, sales increase $1.3, 3.0%, driven by stronger demand for our QRC products.
Current wording
EMEA - excluding favorable changes in foreign currency rates of $2.2, sales increased $2.3, 6.4%, driven by generally stronger demand in the region for both our MCT and FCT products.
Previous 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.
Current wording
APAC - excluding unfavorable changes in foreign currency rates of $0.4, sales increased $6.2, 15.3%, with increased demand in China and Australia.
Previous wording
Americas - sales declined $5.3, 8.9%, primarily from generally softer demand in the region.
Current wording
Americas - sales declined $9.5, 5.7%, primarily from generally softer demand in the region.
Previous 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.
Current wording
EMEA - excluding favorable changes in foreign currency rates of $3.2, sales decreased $3.1, 2.5%, primarily driven by decreased demand in France and Germany..
Previous wording
APAC - excluding unfavorable changes in foreign currency rates of $0.5, sales decreased $2.3, 5.4%, with decreased demand in China, Australia, India and Korea.
Current wording
APAC - excluding unfavorable changes in foreign currency rates of $1.8, sales increased $2.3, 1.9%, with increased demand in China and Australia.
Previous wording
Year-to-date gross profit decreased $5.6, 6.3%, primarily due to lower volume. Gross margin increased 30 basis points as lower material and direct labor costs as a percentage of sales more than offset the impact of lower fixed costs leverage on lower volume and net tariff impacts.
Current wording
Year-to-date gross profit decreased $0.5, 0.4%, as lower material and direct labor costs offset most of the impact of lower volume. Gross margin increased 60 basis points as lower material and direct labor costs as a percentage of sales more than offset the impact of lower fixed costs leverage on lower volume.
Previous wording
Operating income as a percentage of sales was 15.9% in the year-to-date period, flat compared to the prior year as the gross margin increase was offset by higher operating expenses as a percentage of sales. SEA expenses went down by $2.4, mainly due to lower labor and benefit costs, but increased 30 basis points as a percentage of sales.
Current wording
Operating income as a percentage of sales was 16.3% in the year-to-date period, a decline of 40 basis points compared to the prior year as the gross margin decrease was partially offset by lower operating expenses as a percentage of sales.
Previous 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.
Current wording
Third quarter net sales for the Electronics segment increased $13.9, 21.4%, compared with the prior year third quarter. Compared to the prior year period, the third quarter sales increase was driven by the recreational end market. Sales in the mobile and industrial end markets increased slightly, while sales to the health and wellness end market decreased slightly. Changes in foreign currency exchange rates had minimal impact.
Previous 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.
Current wording
Sales increased year over year across most end markets except for health and wellness in the Americas region, while sales increased year over year in all end markets in the EMEA region in the third quarter. For the year-to-date period, sales increased across all end markets in the Americas and EMEA regions. APAC sales increased over the comparable third quarter and year-to-date period in APAC driven by the health and wellness end market.
Previous wording
Year-to-date gross profit decreased $4.8, 9.9%, primarily due to lower volume, higher material costs and higher freight and duties. Freight and duties included a $2.4 expense related to a product import classification change. Gross margin declined 270 basis points over the same period to 30.9%. Excluding the freight and duties expense related to the product import classification change, gross margin was 32.6%, a decline of 100 basis points of the prior year.
Current wording
Year-to-date gross profit increased $2.5, 3.7%, primarily due to higher volume, partially offset by higher freight and duties. Freight and duties included a $2.4 expense related to a product import classification change. Gross margin declined 50 basis points over the same period to 32.1%. Excluding the freight and duties expense related to the product import classification change, gross margin was 33.2%, an improvement of 60 basis points over the prior year.
Previous wording
Year-to-date operating income as a percentage of sales decreased 220 basis points to 9.9% compared to the prior year period. This is primarily due to lower SEA and R&D expenses as a percentage of sales partially offsetting the gross margin decline. SEA expenses increased by $0.4 while R&D expenses decreased by $0.7 year over year.
Current wording
Year-to-date operating income as a percentage of sales increased 20 basis points to 11.8% compared to the prior year period prior to the goodwill impairment charge. This is primarily due to lower R&D expenses as a percentage of sales more than offsetting the gross margin decline. R&D expenses decreased by $1.4 year over year.
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 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.
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 third quarter of 2025, these costs totaled $9.2 for amortization of acquisition-related intangible assets of $7.6, $1.4 for activities related to the Divestiture and $0.2 for officer transition costs. Compared to the third quarter of 2024, these costs increased by $0.4, primarily due to costs related to the Divestiture partially offset by lower amortization of acquisition-related intangible assets and lower officer transition costs. Year-to-date, corporate and other costs totaled $26.6 for amortization of acquisition related intangible assets of $24.1, $1.8 for activities related to the sale of CFP and $0.7 related to officer transition costs, compared to $25.6 in the 2024 year-to-date period that included amortization of acquisition related intangible assets of $23.6, $1.3 for officer transition costs and $0.7 related to our acquisition and integration activities.
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 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.
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 nine months of 2025, cash provided by operating activities totaled $81.3. At the end of the third quarter, we had $54.9 of available cash and cash equivalents on hand and $360.3 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
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.
Current wording
Cash on hand increased $10.8 in the first three quarters of 2025 to $54.9 as of September 27, 2025. Changes in exchange rates during the nine months ended September 27, 2025, positively impacted cash and cash equivalents $2.2. 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 $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.
Current wording
Year-to-date cash from operations decreased by $5.1 to $81.3. 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) increased by $5.4 in the first three quarters of 2025 compared to the same period in 2024. Changes in net operating assets and liabilities negatively impacted cash flow by $10.5 in the third quarter, compared to the prior year period, primarily from an increase in accounts receivable and inventory. Changes in inventory increased cash by $1.0 in comparison to an increase of cash by $16.2 in the first three quarters of 2025 and 2024, respectively. Days of inventory on hand decreased to 118 days as of September 27, 2025, compared with 139 days as of September 28, 2024. Changes in accounts receivable reduced cash by $35.4 and $5.5 in the first three quarters of 2025 and 2024, respectively. Days sales outstanding decreased slightly to 55 days as of September 27, 2025, compared with 57 days as of September 28, 2024. Changes in accounts payable increased cash by $20.3 in comparison to a reduction of cash of $13.4 in 2025 and 2024, respectively. Days payables outstanding for the 2025 year increased to 46 days from 39 days during 2024.
Previous 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.
Current wording
Cash used in investing activities totaled $21.6 in the first three quarters of 2025, compared to $22.1 in the first three quarters of the prior year.
Previous 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.
Current wording
Capital expenditures totaled $18.2, 2.9%, of sales for the first three quarters of 2025, a decrease of $1.4 over the prior year comparable period. Capital expenditures for 2025 are forecasted to be approximately 3.0% to 3.5% of sales, for investments in machinery and equipment, improvements to manufacturing technology and maintaining or replacing existing machine capabilities.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Americas - sales declined $11.2, 9.7%, primarily from generally softer demand in the region.
Previous report — wording carried elsewhere
Changes in foreign currency exchange rates had minimal impact.
Previous report — wording carried elsewhere
Second quarter gross profit decreased $4.7, 18.3% compared to the prior year second quarter, primarily due to lower volume, higher material costs, and higher freight and duties. Freight and duties included a $2.4 expense related to a product import classification change. Gross margin declined 530 basis points, 195 basis points excluding the freight and duties expense related to the product import classification change, primarily due to the impact of lower fixed costs leverage on lower volume, higher material costs and an unfavorable product mix.