HELIOS TECHNOLOGIES, INC.
For the period ended Jan 3, 2026. Filed Mar 3, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Mar 3, 2026
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-K
Period ended 2024-12-28; filed 2025-02-25.
0000950170-25-026703
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-01-03; filed 2026-03-03.
0001193125-26-087747
Item 7. 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 113 previous paragraphs and 126 current paragraphs.
63 unchanged; 37 reworded; 26 added; 13 removed; 0 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 (26)
Current report
Tariffs
Current report
During the fiscal year 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. Such tariffs were implemented under several legal frameworks, including the International Emergency Economic Powers Act ("IEEPA"). Courts have found that IEEPA does not authorize the President of the United States to impose tariffs, and the enforcement of other tariffs may prove inconsistent over time. It remains to be seen whether the federal government may impose further tariffs under other statutory regimes or legal theories. These decisions introduce future uncertainty regarding potential refund processes and future trade policy actions and could affect the Company's cost structure and supply chain planning. We are unable to predict the ultimate outcome or effectiveness of any current or future tariff policies.
Current report
We export products from our U.S. locations to more than 40 countries. Our total U.S. exports were approximately $133.2 or 15.9% of total sales in the year ended January 3, 2026, of which exports to China were $13.4 or 1.6% of total sales in the period. 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 report
Due to the fluidity of the tariff environment and potential subsequent changes to effective dates, amounts of announced tariffs, and various exemptions for imports into the U.S. (especially in light of the recent federal court decisions invalidating certain previously announced tariffs), we are unable to fully quantify the impact the tariffs will have on our results of operations when and if enacted. Our current expectation, however, is to leverage our regional production capabilities, source components from local suppliers, and raise our prices, which we believe may mitigate the impact of higher tariff costs, though we are not able to provide assurances that we will be able to offset any or all tariff-related costs. Additionally, increased prices could impact demand for our products, including our ability to attract new customers or cause increases in existing customer attrition. If our attempts to mitigate tariff-related costs are not sufficient to offset our increased tariff-related costs adequately or in a timely manner, our business, results of operations, and our financial and/or operating costs may be adversely affected.
Current report
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.
Current report
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.
Current report
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.
Current report
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,
Current report
2025, the Board elected Laura Dempsey Brown to serve as the new Non-Executive Chair of the Board, effective March 13, 2025.
Current report
On March 31, 2025, Lee Wichlacz, the President of Electronics, was separated from the Company, and Billy Aldridge was named as Senior Vice President, Managing Director, Electronics Segment. Mr. Aldridge has served as the Senior Vice President, Managing Director of Enovation Controls since May 3, 2021, and will now have responsibility for the complete group of operations that comprise the Electronics segment.
Current report
On June 5, 2025, the Board appointed Ian Walsh to serve as a member of the Board effective June 5, 2025. Mr. Walsh was also appointed to serve on the Board's Audit Committee and Governance Committee. He serves as a member of the class of directors whose term will expire at the 2026 Annual Meeting of Shareholders.
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, 2025. In connection with Mr. Connaway's appointment, Sean Bagan, President, Chief Executive Officer, and Chief Financial Officer, no longer held the corporate officer position of Chief Financial Officer as of October 13, 2025.
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
On November 17, 2025, the Board, announced that Jeremy Evans had been named the Company’s Executive Vice President and Chief Financial Officer effective immediately. Mr. Evans succeeded Michael Connaway who was separated from the Company, previously joining Helios on October 13, 2025. Mr. Connaway’s departure was not related to any disagreement with the Company on any matter relating to its accounting practices, financial statements, internal controls or operations.
Current report
The year-over-year comparison is impacted by the sale of the outstanding equity interest in Guwing Holdings Pty. Ltd. ("Guwing"), and Guwing's 100% ownership of the share capital of Custom Fluidpower Pty. Ltd. ("CFP") to a non-related party (the "Divestiture") that was completed on September 27, 2025. As a result of the Guwing and CFP sales were impacted approximately $14.3 in 2025.
Current report
Gross profit increased $18.9, 7.5%, in 2025 driven by higher volume and lower direct labor costs of $3.8 partially offset by higher material costs of $17.0. Gross margin was up 100 basis points year-over-year. The margin improvement was primarily due to lower overhead costs as a percentage of sales driven by leverage on higher volume and increased productivity, partially offset by a slight increase in material costs as a percentage of sales and the net impact of tariffs.
Current report
Net sales for the Hydraulics segment increased by $3.6, 0.7%. Net Sales increased in 2025 due to improved demand in the mobile end market. Net sales in the agriculture market were relatively flat year-over-year, although there was stabilization of sales throughout the year and growth in the second half. Net sales in the industrial end market declined year-over-year and remained depressed throughout the year. There was increased demand in the EMEA region while sales to the Americas and APAC declined from prior year. The decline in APAC sales was primarily driven by the Divestiture in the third quarter of 2025. Discrete impacts to our organic sales included nominal favorable pricing changes of $3.1, 0.7%, and a favorable change in foreign currency exchange rates of $4.4, 0.8%. Fiscal 2025 also benefited from an extra week of sales due to our fiscal calendar compared to prior year.
Current report
During 2025, gross profit increased $9.0, 5.4%, primarily due to higher volume. Gross margin increased by 140 basis points primarily due to lower overhead costs as a percentage of sales driven by leverage on higher volume, increased productivity, and targeted pricing actions.
Current report
Operating income as a percentage of sales increased 80 basis points to 16.9% due to the higher gross margin partially offset by an increase in operating expenses. Operating expenses increased $4.0, 5.0%, mainly due to higher labor and benefit costs, higher research and development costs of $0.8, and higher travel costs of $0.7. The prior year operating expenses included a $3.7 reversal of unvested stock compensation in connection with the officer transition in July 2024 and $1.2 in costs related to cleanup, repair and labor incurred as a direct result of Hurricane Milton. Operating expenses as a percent of sales increased 60 basis points to 15.4% in 2025.
Current report
Net sales for the Electronics segment increased by $29.5, 11.0% in 2025 compared with the prior year period, with growth across all regions. Sales increased in the America’s region within several of our end markets including recreational, industrial and mobile. The recreational end market was up over 25% driven by strong demand from our OEM customers. The APAC region's sales increased driven by health and wellness end market sales to China. Sales in the EMEA region increased year over year on generally improved demand. Discrete impacts to our organic sales included pricing changes that were favorable by $1.9, 0.7%. Fiscal 2025 also benefited from an extra week of sales due to our fiscal calendar compared to prior year.
Current report
During 2025, gross profit increased $9.9, 11.4%, primarily due to higher volume and increased productivity, partially offset by higher material costs and freight and duties. Freight and duties included a $2.4 expense related to a product import classification change. Gross margin increased 10 basis points over the same period to 32.3%. Excluding the freight and duties expense related to the product import classification change, gross margin was 33.1%, an improvement of 90 basis points over the prior year.
Current report
Operating income as a percentage of sales decreased 780 basis points to 3.2% primarily due to the goodwill impairment recorded in our i3PD reporting unit during the third quarter. Prior to the goodwill impairment charge, operating income as a percentage of sales increased 100 basis points to 12.0% compared to the prior year period. Operating expenses increased $4.1, 7.0%, in 2025 primarily from an increase in wages and benefits, marketing expenses of $0.6, and travel of $0.5. The prior year operating expenses included the benefit of a $1.8 reversal of unvested stock compensation in connection with the officer transition in July 2024. Operating expenses as a percent of sales, excluding the goodwill impairment, decreased 80 basis points to 20.4% in 2024, reflecting increased leverage of operating expenses as a result of higher sales.
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 currently expect the legislation to have a material impact on our consolidated financial statements.
Current report
The Company completed its annual goodwill impairment testing for 2025. In the second quarter of 2025, the Company announced a leadership change in the Electronics segment from Lee Wichlacz to Billy Aldridge. Under the new leadership in the third quarter of 2025, the Company evaluated the strategy and financial projections related to i3 Product Development ("i3PD"), a custom engineering services firm we acquired in May of 2023 that is part of our Electronics segment. That evaluation led to a reduction in the i3PD projected profit contributions to the Company over the short and mid-term due to de-emphasizing i3PD sales that do not align with the Company's core business. We performed a test for goodwill impairment as of the third quarter period end date and concluded goodwill was impaired.
Current report
The fair value of the i3PD reporting unit was determined based on an income approach methodology. A market approach methodology was evaluated but not used as the Company determined information for companies comparable to i3PD was not readily available. The income approach utilized a discounted cash flow analysis, which estimates the present value of the projected free cash flows to be generated by the reporting unit. Principal assumptions used in the analysis included the Company's estimates of future revenue and terminal growth rates, margin assumptions and discount rates. While assumptions utilized are subject to a high degree of judgment and complexity, the Company made every effort to estimate future cash flows as accurately as possible, given the high degree of economic uncertainty that existed. The Company concluded that the estimated fair value of the i3PD reporting unit was less than its carrying value, and as a result, recorded a non-cash, non-tax-deductible goodwill impairment charge of $25.9. This represents the full amount of goodwill for the i3PD reporting unit.
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 currently expect the legislation to have a material impact on our consolidated financial statements.
Removed paragraphs (13)
Previous report
In July 2022, we completed the acquisition of the assets of Taimi R&D, Inc., a Canadian manufacturer of innovative hydraulic components that offers ball-less design swivel products, which improve hydraulic reliability of equipment, increase the service life of components and help protect the environment by reduced leakage. Taimi brings a differentiated, yet complementary product line to our hydraulics platform as well as strong engineering breadth.
Previous report
In September 2022, we completed the acquisition of Daman Products Company, headquartered in Mishawaka, Indiana. Daman is a leading designer and manufacturer of standard and custom precision hydraulic manifolds and other fluid conveyance products for its customer base, predominantly in North America. The acquisition of Daman expands the Company's technologies and markets and provides an opportunity to produce integrated package offerings with multiple Helios brands.
Previous report
Supply Chain
Previous report
While there were no impacts to operations resulting from the COVID-19 Pandemic in 2024, for comparison purposes the results in the early part of 2023 faced constraints related to sourcing certain electronic and other components, which originated from the high demand for these products caused by the pandemic. We were able to mitigate some of the impact with our procurement efforts, production schedule adjustments and product redesigns. The availability of components improved through 2023 and did not have a significant impact to results in 2024.
Previous report
Gross profit declined $9.4, 3.6%, in 2024 driven by lower volume and higher wage and benefit costs of $6.1M partially offset by lower restructuring costs of $3.0M and lower material costs. Gross margin was flat year-over-year. Material costs as a percentage of sales, excluding targeted pricing benefits and acquisition-related sales, were down slightly year-over-year on a consolidated basis. This was offset by lower fixed overhead costs leverage on lower volume and cost impacts noted above. Changes in foreign currency exchange rates compared to 2023 reduced gross profit by $0.1.
Previous report
Net sales for the Hydraulics segment declined by $28.6, 5.1%. We experienced organic net sales decline of $30.5, 5.4%, as acquisition sales only impacted results by $1.9. Net Sales declined in 2024 due to decreased demand in the Americas and EMEA regions and significant declines in the agricultural, mobile and industrial end markets. Sales to APAC grew from prior year, primarily driven by sales to China and Australia. Discrete impacts to our organic sales included nominal favorable pricing changes of $2.2, 0.4%, and an unfavorable change in foreign currency exchange rates of $0.5, 0.1%.
Previous report
During 2024, gross profit declined $16.0, 8.8%, from lower volume and higher direct labor costs. Gross margin declined by 120 basis points primarily due to lower fixed overhead costs leverage on lower volume and sales mix. Material costs as a percentage of sales were relatively flat, excluding pricing changes and acquisition-related sales. Changes in foreign currency exchange rates had an unfavorable impact of $0.1.
Previous report
Operating income as a percentage of sales decreased 40 basis points to 16.1%. SEA expenses decreased $9.1, 10.3%, mainly due to lower labor and benefit costs, which includes a $3.7 reversal of unvested stock compensation in connection with the officer transition in July 2024, a reduction in research and development costs of $0.6 and a reduction in travel, professional services and other discretionary spend. SEA as a percent of sales decreased 80 basis points to 14.8% in 2024.
Previous report
Net sales for the Electronics segment declined by $1.1, 0.4%. We experienced organic net sales decline of $4.2, 1.6%, which was partially offset by acquisition sales of $3.1. Organic sales declined in 2024 from decreased demand in the America’s region within several of our end markets including recreational, industrial and mobile. Health and wellness increased year over year and almost offset the losses in the other end markets. The APAC region increased driven by a significant increase in sales to China. Sales in the EMEA region were relatively flat. Discrete impacts to our organic sales included pricing changes that were favorable by $2.8, 1.0%, and unfavorable changes in foreign currency exchange rates of $0.2, 0.1%.
Previous report
During 2024, gross profit increased $6.6, 8.3%, primarily due to the contribution from acquisition revenues, pricing, and lower material costs. Gross margin for 2024 increased by 260 basis points primarily from lower material costs offset by the impact of a higher mix of revenue in products with a lower margin profile. Material costs as a percentage of sales decreased by 330 basis points, excluding pricing changes and acquisition-related sales.
Previous report
Operating income as a percentage of sales decreased 180 basis points to 11.0%. SEA expenses increased $1.7, 3.1%, in 2024 primarily from acquisitions, an increase in research and development costs of $1.7, which were partially offset by the benefit of a $1.8 reversal of unvested stock compensation in connection with the officer transition in July 2024. SEA as a percent of sales increased 70 basis points to 21.2% in 2024 from 20.5% in 2023, reflecting the impact of acquisitions and increased costs referenced above.
Previous report
As of December 28, 2024, the Company had approximately $37.1 million of undistributed earnings of its non-U.S. subsidiaries for which it has not provided for non-U.S. withholding taxes and state taxes because such earnings are intended to be reinvested indefinitely in international operations.
Previous report
Given the relatively small excess fair value over the carrying value of the i3 reporting unit in 2024, less than 3%, it is at risk for possible future impairment. This goodwill value of $25.9, assumed in the May 2023 acquisition of i3, is 5.2% of the $498.9 of Goodwill as of December 28, 2024. Management is monitoring this closely but believes in the benefits that this acquisition and specifically the Cygnus software will bring to the Company in the coming years. However, if the expected benefits do not materialize due to poor economic conditions, missed operational objectives, or other such factors impacting Management’s assumptions, there could future impairment of the goodwill.
Reworded paragraphs (37)
Previous wording
The operating results of the Hydraulics and Electronics segments included in Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented on a basis consistent with our internal management reporting. Segment information included in Note 16 of the Notes to the Consolidated Financial Statements included in this Annual Report is also presented on this basis. All differences between our internal management reporting basis and accounting principles generally accepted in the U.S. (“U.S. GAAP”), specifically the allocation of certain corporate and acquisition-related costs, are included in Corporate and Other.
Current wording
The operating results of the Hydraulics and Electronics segments included in Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented on a basis consistent with our internal management reporting. Segment information included in Note 16 of the Notes to the Consolidated Financial Statements included in this Annual Report is also presented on this basis. All differences between our internal management reporting basis and accounting principles generally accepted in the U.S. (“U.S. GAAP”), specifically the allocation of certain corporate, divestiture-related, and acquisition-related costs, are included in Corporate and Other.
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. The Electronics segment designs and manufactures customized electronic controls systems, displays, wire harnesses, and software solutions for a variety of end markets.
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, and quick release couplings as well as engineers hydraulic solutions and in some cases complete systems. The Electronics segment designs and manufactures customized electronic controls systems, displays, wire harnesses, and software solutions for a variety of end markets.
Previous wording
With our global operating network we have the advantages of leveraging sales, marketing, innovation, customer relationships and operational excellence across all our businesses. We are committed to furthering the mission of integrating the businesses and leveraging resources to best serve our customers and explore new opportunities.
Current wording
With our global operating network, we have the advantages of leveraging sales, marketing, innovation, customer relationships and operational capabilities across all our businesses. We continue to drive best practices across all of our businesses and are committed to leveraging resources to best serve our customers and explore new opportunities.
Previous wording
In January 2023, we completed the acquisition of Schultes Precision Manufacturing, Inc. Schultes is a highly trusted specialist in manufacturing precision machined components and assemblies for customers requiring very tight tolerances, superior quality, and exceptional value-added manufacturing processes. Currently serving the hydraulic, aerospace, communication, food services, medical device, and dental industries, Schultes brings the manufacturing quality, reliability, and responsiveness critical to its customers’ success. Schultes provides additional manufacturing know-how and expands our business into new end markets with attractive secular tailwinds.
Current wording
In January 2023, we completed the acquisition of Schultes Precision Manufacturing, Inc. Schultes is a highly trusted specialist in manufacturing precision machined components and assemblies for customers requiring very tight tolerances, superior quality, and exceptional value-added manufacturing processes. Currently serving the hydraulic, aerospace, communication, food services, medical device, and dental industries, Schultes brings the manufacturing quality, reliability, and responsiveness critical to its customers’ success. Schultes provided additional manufacturing know-how and expanded our business into new end markets with attractive secular tailwinds.
Previous wording
In May 2023, we completed the acquisition of i3 Product Development. i3 is a custom engineering services firm, with engineers specializing in electronics, mechanical, industrial, embedded and software engineering. i3 specializes in working to transform customer’s ideas into industrial design solutions through rapid prototyping and creating 3D models in-house. Their solutions are used across many sectors, including medical, off-highway, recreational and commercial marine, power sports, health and wellness, agriculture, consumer goods, industrial, sports and fitness.
Current wording
In May 2023, we completed the acquisition of i3 Product Development. i3PD is a custom engineering services firm, with engineers specializing in electronics, mechanical, industrial, embedded and software engineering. i3PD specializes in transforming customer’s ideas into industrial design solutions through rapid prototyping and creating 3D models in-house. Their solutions are used across many sectors, including medical, off-highway, recreational and commercial marine, power sports, health and wellness, agriculture, consumer goods, industrial, sports and fitness.
Previous wording
In 2024, the Company continued to explore and evaluate potential acquisitions, but no acquisitions were executed.
Current wording
In 2024 and 2025, the Company continued to explore and evaluate potential acquisitions, but no acquisitions were executed.
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 15% in 2024, after decreasing 4% in 2023 and increasing 20% in 2022. In Europe, the CEMA Business Barometer reported in January 2025 that the general business climate index for the European agricultural machinery industry has risen further but continues in negative territory. The majority of survey participants expect incoming orders to rise in the coming six months from their current depressed levels and the confidence index for almost all European markets has improved. CEMA further reported that the direct customers of the manufacturers, the dealers, have still not been able to pass on all orders to the end customers and the dealer stocks continue with above-average levels in almost all European markets, though a considerable improvement can be seen compared to previous months. The Committee for European Construction Equipment business climate index bounced back slightly in later part of 2024 after consecutive months of decline. They reported that sales in the European market are still declining but the momentum decelerates. The expectations for next year are pretty diverse across the industry, as one third of companies anticipate a return to growth while almost the same share expects more declines to come.
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 4% in 2025, after decreasing 15% in 2024 and decreasing 4% in 2023. In Europe, the CEMA Business Barometer reported in December 2025 that the general business climate index for the European agricultural machinery industry has declined from November to December. The majority of survey participants expect incoming orders to decline in the coming six months as the current business situation is assessed similarly to the previous month. CEMA further reported that Tractor and harvesters’ manufacturers see a deterioration in the current situation. A comparison of countries shows a slight improvement for the current situation in German and France, while in Spain the situation has deteriorated. Export business has been improving for three months due to improved orders outside of the EU. Australia and New Zealand are expected to be areas of growth ahead of Western Europe and Africa. This is expected to help compensate for the decline in the United States.
Previous wording
The Federal Reserve’s Industrial Production Index, which measures the real output of all relevant establishments located in the U.S., reports production of semiconductors and other electronics components declined through 2024 with an uptick at the end of December 2024. The Institute of Printed Circuits Association (“IPC”) reported that North American printed circuit board (“PCB”) shipments decreased in December 2024 by 0.3% against the same month last year following a year over year increase in November of 4.7% and a year over year decline in October of 11.1%. PCB bookings increased year over year in the last quarter with December up 59.6%, November up 29.1% and October up 3.5%. The IPC also reported that North American electronics manufacturing services (“EMS”) shipments decreased 7.8% in December 2024 compared to the same month last year following year over year increases in October and November of 14.7% and 10.6%, respectively. EMS bookings also increased year over year in the last quarter with December up 28%, November up 8.1% and October up 6.6%. The significant year over year increase in both PCB and EMS bookings were attributed to orders being pulled forward due to tariff uncertainties.
Current wording
The Federal Reserve’s Industrial Production Index, which measures the real output of all relevant establishments located in the U.S., reports output of semiconductors and other electronics components increased sequentially each quarter in 2025. The Institute of Printed Circuits Association (“IPC”) reported that total North American printed circuit board (“PCB”) shipments were up 11% in December after being up 21.1% in November and up 24.4% in October compared with the same months last year. PCB bookings in 2025 were up 11.0% in December compared to the prior year, while bookings for the full year were higher by 15.0%. 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 the stronger demand environment that started the year continues. The IPC also reported that North American electronics manufacturing services (“EMS”) shipments decreased 0.4% in 2025, however increased 5.6% in December compared to the prior year. EMS bookings increased 5.1% in December year over year after decreasing 4.1% in November and increasing 6.4% in October, highlighting the sector's choppiness in the quarter.
Previous wording
During 2024, we incurred $5.2 of costs related to our restructuring activities, down from $12.1 in 2023. Restructuring activities include activities within our Hydraulics segment related to the creation of our two new Regional Operational Centers of Excellence ("CoE") which are nearing completion. 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 have also recently initiated some restructuring activities to better optimize our European regional operations. We are transitioning some manufacturing of manifolds and integrated package assembly to our Roncolo, Italy location. These activities include in part the transferring of equipment and operations between facilities. The restructuring costs are comprised of non-recurring severance and termination benefits of $2.5 and $2.7 of travel and other expenses. The restructuring plans are expected to improve the global cost structure of the business.
Current wording
During 2025, we incurred $1.6 of costs related to our restructuring activities, down from $5.3 in 2024. Restructuring activities include activities within our Hydraulics segment related to the creation of our two new Regional Operational Centers of Excellence ("CoE") which are now complete. 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.
Previous wording
In July 2024, the Board of Directors terminated the former President and Chief Executive Officer, Josef Matosevic. Sean Bagan was immediately appointed to serve as Interim President and Chief Executive Officer in addition to his role as Chief Financial Officer, and Philippe Lemaitre as Executive Chairman in addition to his role as Chairman, while the search for a replacement was underway. On January 6, 2025, the Company announced that the Board of Directors of the Company promoted Sean Bagan to President and Chief Executive Officer of the Company, effective January 6, 2025. He will continue to serve as Chief Financial Officer while the Company conducts a search process to identify a permanent Chief Financial Officer. In connection with Mr. Bagan’s appointment, Chairman Philippe Lemaitre, serving as Executive Chairman, resumed his role as Non-Executive Chairman.
Current wording
In July 2024, the Board of Directors terminated the former President and Chief Executive Officer, Josef Matosevic. Sean Bagan was immediately appointed to serve as Interim President and Chief Executive Officer in addition to his role as Chief Financial Officer, and Philippe Lemaitre as Executive Chairman in addition to his role as Chairman, while the search for a replacement was underway. On January 6, 2025, the Company announced that the Board of Directors of the Company promoted Sean Bagan to President and Chief Executive Officer of the Company, effective January 6, 2025. In connection with Mr. Bagan’s appointment, Chairman Philippe Lemaitre, serving as Executive Chairman, resumed his role as Non-Executive Chairman.
Previous wording
Consolidated net sales for the 2024 year declined $29.7, 3.6%. We experienced organic net sales decline of $34.7 which was partially offset by sales from acquisitions totaling $5.0. Sales were impacted most by reduced demand for products in our agriculture, mobile, industrial and recreational marine markets. These end markets experienced lower year over year demand with declines persisting through the fourth quarter. Sales to the Health and Wellness end market were up from the prior year almost 20%. As previously noted, during the Covid-19 pandemic consumers significantly invested in health and leisure products, accelerating sales in that end market. This was followed by a sharp decline in 2023. 2024 was more in line with pre-pandemic demand levels. In 2024, consolidated net sales were down in the Americas and EMEA, but up in APAC which was primarily driven by increased sales to China. There was an unfavorable impact of $0.7 on consolidated net sales from changes in foreign currency exchange rates during the year.
Current wording
Consolidated net sales for the 2025 year increased $33.1, 4.1%. Sales were impacted most by stronger demand for products in our mobile and recreational marine markets. Sales in the industrial end market declined year over year while sales in the agriculture and health and wellness end markets were flat to slightly up year over year. The demand environment improved as the year progressed with consolidated net sales growth realized in the second half of the year more than offsetting year over year sales decline in the first half. In 2025, consolidated net sales were up in all regions, with sales to EMEA outpacing sales to the Americas and APAC. There was an favorable impact of $4.4 on consolidated net sales from changes in foreign currency exchange rates during the year. Fiscal 2025 also benefited from an extra week of sales due to our fiscal calendar compared to prior year.
Previous wording
Operating income as a percentage of sales increased 60 basis points to 10.2% in 2024 compared with the prior year period. Operating margin was favorably impacted during 2024 most significantly from lower payroll and benefit costs compared with the prior year period, which included a $5.5 reversal of unvested stock compensation in connection with the officer transition in July 2024 and lower selling, engineering and administrative ("SEA") restructuring costs of $3.9. Additionally, M&A and Integration SEA costs in 2024 were down $3.3 in 2024. These were partially offset by an increase in research and development costs of $0.9.
Current wording
Operating income as a percentage of sales decreased 230 basis points to 7.9% in 2025 compared with the prior year period. Operating margin was unfavorably impacted during 2025 most significantly from a goodwill impairment of $25.9 in the third quarter of 2025 related to our i3PD business. Prior to the goodwill impairment charge, 2025 operating income as a percentage of sales increased 80 basis points to 11.0% compared with the prior year period. The increase is primarily due to the gross margin improvement, lower selling, engineering and administrative ("SEA") restructuring costs of $3.7, and lower research and development costs of $1.1 partially offset by higher payroll and benefit costs compared with the prior year period. The prior year period payroll and benefit costs included a $5.5 reversal of unvested stock compensation in connection with the officer transition in July 2024.
Previous wording
Net income and earnings per share (“EPS”) were favorably impacted by a contingent gain of $3.8 related to the insurance reimbursement for business interruption losses incurred in the third quarter of 2023 at a manufacturing location in Italy. They were unfavorably impacted by foreign currency transaction losses of $1.3 in 2024 compared to a loss of $0.6 in 2023. There was a slight decrease in tax expense of $0.2 and an increase in interest expense of $2.6 compared to 2023.
Current wording
Net income increased $9.4, 24.1% while earnings per share (“EPS”) increased 23.9% in 2025. The current year benefited from a $15.2 net gain after tax related to the Divestiture and a decrease in interest expense of $11.9 compared to 2024, including the favorable impact of $5.4 interest rate swap gain recognized in the fourth quarter. The prior year benefited from a contingent gain of $3.8 related to the insurance reimbursement for business interruption losses incurred in the third quarter of 2023 at a manufacturing location in Italy. There was no impact from foreign currency transaction losses as losses were $1.3 in both 2025 and 2024 . There was an increase in tax expense of $2.5 in 2025 compared to 2024.
Previous wording
In 2024, we continued and are nearing completion of our restructuring activities within our Hydraulics segment related to the creation of our two new regional operational Centers of Excellence. We also initiated some restructuring activities to better optimize our European regional operations. We incurred $4.5 of restructuring costs related to these activities including labor, travel and other expenses associated with the manufacturing relocation. $3.3 of the costs are included in cost of goods sold and $1.2 are reflected in SEA expenses.
Current wording
In 2025, we completed the restructuring activities within our Hydraulics segment related to the creation of our two new regional operational Centers of Excellence. We also initiated some restructuring activities to better optimize our European regional operations. We incurred $1.3 of restructuring costs related to these activities in 2025 including labor, travel and other expenses associated with the manufacturing relocation. $0.4 of the costs are included in cost of goods sold and $0.9 are reflected in operating expenses. In 2024, we incurred $4.5 restructuring costs related to the creation of the two new regional operational Centers of Excellence and optimization of our European regional operations. $3.3 of the costs are included in cost of goods sold and $1.2 are reflected in operating expenses.
Previous wording
In the third quarter of 2023, the Company experienced aggregate losses related to a fire and a weather-related incident at one of its manufacturing locations in Italy resulting in the shut-down of operations for a period of time and disruption in production as recovery efforts ensued. Impacted operations were restored. At the end of 2024 we recorded a contingent gain related to the open insurance claims. The total reimbursement recorded was $9.1, of which $5.3 was offset against actual costs as a result of the incident and the remaining $3.8 was recorded as a gain included in Other Income. The reimbursement payments have been collected in 2025, with $1.1 million outstanding to be collected.
Current wording
In the third quarter of 2023, the Company experienced aggregate losses related to a fire and a weather-related incident at one of its manufacturing locations in Italy resulting in the shut-down of operations for a period of time and disruption in production as recovery efforts ensued. Impacted operations were restored. At the end of 2024 we recorded a contingent gain related to the open insurance claims. The total reimbursement recorded was $9.1, of which $5.3 was offset against actual costs as a result of the incident and the remaining $3.8 was recorded as a gain in 2024 included in Other Income. The reimbursement payments were collected in 2025.
Previous wording
In 2024, we continued and are nearing completion of our restructuring activities within our Electronics segment to shift product lines to the expanded facility in Tijuana and to adjust our labor base in line with current demand levels. We incurred $0.7 of restructuring costs including labor, travel and other expenses associated with the manufacturing relocation. $0.1 of the costs are included in cost of goods sold and $0.6 are reflected in SEA expenses.
Current wording
In 2024, we had restructuring activities within our Electronics segment to shift product lines to our low cost manufacturing facility in Tijuana and to adjust our labor base in line with current demand levels. We incurred $0.7 of restructuring costs including labor, travel and other expenses associated with the manufacturing relocation. $0.1 of the costs are included in cost of goods sold and $0.6 are reflected in operating expenses. In 2025, we paused our restructuring activities related to shifting product lines to the low cost manufacturing facility in Tijuana as a result of the uncertainty around trade tariffs. Costs incurred in 2025 as part of the HCEE restructuring which reallocated resources across the organization as well as eliminated certain positions and subsequent leadership change totaled $0.7.
Previous wording
Certain costs are excluded from business segment results as they are not used in evaluating the results of, or allocating resources to, our operating segments. For the year ended December 28, 2024, these costs totaled $34.2 and included amortization of acquisition-related intangible assets of $31.5, $1.9 related to officer transition costs and $0.8 related to other costs which was primarily acquisition and integration related activities.
Current wording
Certain costs are excluded from business segment results as they are not used in evaluating the results of, or allocating resources to, our operating segments. For the year ended January 3, 2026, these costs totaled $35.1 and included amortization of acquisition-related intangible assets of $31.7, $2.0 primarily related to costs associated with the Divestiture activities and $1.4 related to officer transition costs.
Previous wording
For the year ended December 30, 2023, these costs totaled $38.1 and included amortization of acquisition-related intangible assets of $32.9, $4.0 related to other acquisition and integration activities and $1.2 of officer transition costs.
Current wording
For the year ended December 28, 2024, these costs totaled $34.2 and included amortization of acquisition-related intangible assets of $31.5, $1.9 related to officer transition costs and $0.8 related to other costs which was primarily acquisition and integration related activities.
Previous wording
Net interest expense increased $2.6 during 2024 to $33.8 compared with $31.2 in 2023. The change is attributable to higher average debt levels during 2024 and higher interest rates. Average net debt increased by $1.5 during 2024 to $448.9.
Current wording
Net interest expense decreased $11.9 during 2025 to $21.9 compared with $33.8 in 2024. The change is attributable to lower average debt levels during 2025, lower interest rates, and net impact of interest rate swaps of $5.4. Average net debt decreased by $99.1 during 2025 to $349.8.
Previous wording
The provision for income taxes for the year ended December 28, 2024, was 22.8% of pretax income compared with 23.8% for the year ended December 30, 2023. The difference relates principally to a shift in the mix of the company's worldwide income and decrease in valuation allowance established. The effective rate typically fluctuates relative to the levels of income and different tax rates in effect from year to year among the countries in which we sell our products.
Current wording
The provision for income taxes for the year ended January 3, 2026, was 22.5% of pretax income compared with 22.8% for the year ended December 28, 2024. The effective rate typically fluctuates relative to the levels of income and different tax rates in effect from year to year among the countries in which we sell our products.
Previous wording
The Organization for Economic Cooperation and Development (“OECD”), under its Pillar Two initiative, recently has proposed a set of Global Anti-Base Erosion (“GloBE”) rules to impose a minimum tax on income earned by multinational enterprises (“MNE”). Specifically, the GloBE rules impose a minimum tax of 15 percent on MNE income that arises in each participating jurisdiction. Several countries, including the UK and EU member states, have agreed to adopt the OECD’s minimum tax rules and several countries, including the UK, have already implemented these rules.
Current wording
The Organization for Economic Cooperation and Development (“OECD”), under its Pillar Two initiative, introduced a framework set of Global Anti-Base Erosion (“GloBE”) rules to impose a minimum tax on income earned by multinational enterprises (“MNE”). Specifically, the GloBE rules impose a minimum tax of 15 percent on MNE income that arises in each participating jurisdiction. Several countries, including the UK and EU member states, have agreed to adopt the OECD’s minimum tax rules and several countries, including the UK, have already implemented these rules.
Previous wording
The Helios Technologies Inc Group is a MNE group that is within the scope and subject to the GloBE rules. The United States has not currently made any public announcement regarding implementation of Pillar Two Framework.
Current wording
The Helios Technologies Inc Group is a MNE group that is within the scope and subject to the GloBE rules. The United States has not enacted legislation implementing the Pillar Two GloBE rules.
Previous wording
Historically, our primary source of capital has been cash generated from operations. We have also used borrowings on our credit facilities to fund acquisitions. During 2024, net cash provided by operating activities totaled $122.1 and as of December 28, 2024, we had $44.1 of cash on hand and $352.4 of available credit on our revolving credit facilities. At year end 2024, approximately half of the cash on hand was held in institutions in APAC, approximately 40% was held in institutions in EMEA, and the remainder was held in institutions in the Americas. We also have a $400.0 accordion feature available on our credit facility, which is subject to certain pro forma compliance requirements and is intended to support potential future acquisitions.
Current wording
Historically, our primary source of capital has been cash generated from operations. We have also used borrowings on our credit facilities to fund acquisitions. During 2025, net cash provided by operating activities totaled $127.3 and as of January 3, 2026, we had $73.0 of cash on hand and $393.6 of available credit on our revolving credit facilities. At year end 2025, approximately half of the cash on hand was held in institutions in APAC, approximately 38% was held in institutions in EMEA, and the remainder was held in institutions in the Americas. We also have a $400.0 accordion feature available on our credit facility, which is subject to certain pro forma compliance requirements and is intended to support potential future acquisitions.
Previous wording
Cash on hand increased $11.7 to $44.1 at the end of 2024. Cash and cash equivalents were unfavorably impacted by changes in exchange rates by $1.7 and favorably impacted by changes in exchange rates by $0.8 during the years ended December 28, 2024, and December 30, 2023, respectively. 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 also paying down borrowings on our credit facilities.
Current wording
Cash on hand increased $28.9 to $73.0 at the end of 2025. Cash and cash equivalents were favorably impacted by changes in exchange rates by $3.2 and unfavorably impacted by changes in exchange rates by $1.7 during the years ended January 3, 2026, and December 28, 2024, respectively. 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 also paying down borrowings on our credit facilities.
Previous wording
Net cash from operations totaled $122.1 in 2024, an increase of $38.2, 45.5%, compared with the prior year. 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 $1.0 compared to the prior year. However, changes in net operating assets and liabilities increased cash by $39.2 compared to 2023, primarily from reduction in inventories. Reductions in inventory, net of acquisitions, increased cash by $19.4 in 2024 compared with a decrease in cash by $17.9 in 2023. Inventory on hand as of December 28, 2024, decreased by $25.0, 11.6%, compared to the 2023 year end. The decrease is driven primarily by the execution of management's inventory reduction efforts and improved inventory management in response to lower sales. Days of inventory on hand increased to 134 days for the 2024 year, compared with 130 days during the 2023 year. Changes in accounts receivable, net of acquisitions, increased cash by $7.3 and $16.3 in 2024 and 2023, respectively. Days sales outstanding for the 2024 year decreased slightly to 47 days from 50 days during 2023, as our collection patterns remain consistent with the prior year. Changes in accounts payable, net of acquisitions, decreased cash by $11.8 and $5.2 in 2024 and 2023, respectively. Days payables outstanding for the 2024 year decreased to 37 days from 45 days during 2023.
Current wording
Net cash from operations totaled $127.3 in 2025, an increase of $5.2, 4.3%, compared with the prior year. 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 $16.4 compared to the prior year driven by higher volume and lower interest expense. However, changes in net operating assets and liabilities decreased cash by $11.1 compared to 2024, primarily from working capital dynamics. Reductions in inventory, net of acquisitions, decreased cash by $2.7 in 2025 compared with an increase in cash by $19.4 in 2024. Inventory on hand as of January 3, 2026, decreased by $1.5, 0.8%, compared to the 2024 year end. The decrease is related to the sale of Custom Fluidpower partially offset by higher sales. Days of inventory on hand decreased to 124 days for the 2025 year, compared with 134 days during the 2024 year. Changes in accounts receivable, net of acquisitions, decreased cash by $16.5 and increased cash by $7.3 in 2025 and 2024, respectively. Days sales outstanding for the 2025 year increased slightly to 51 days from 47 days during 2024. Changes in accounts payable, net of acquisitions, increased cash by $22.0 and decreased cash by $11.8 in 2025 and 2024, respectively. Days payables outstanding for the 2025 year increased to 49 days from 37 days during 2024, due to focused efforts to renegotiate terms with key suppliers.
Previous wording
Cash used in investing activities totaled $30.3 in 2024, a decrease of $123.6, 80.3%, compared with the prior year. The decrease in acquisition-related payments accounted for $114.2 of the fluctuation due to no acquisition-related activity in 2024. Capital expenditures were $27.0 during 2024, $7.3, or 21.3%, lower than the prior year primarily from cost deferral initiatives in 2024. Capital expenditures for 2025 are forecasted to be approximately 3.0%-4% of sales for improvements to manufacturing technology and maintaining and replacing existing machine capabilities.
Current wording
Cash provided in investing activities totaled $20.3 in 2025 compared to cash used in investing activities of $30.3 in 2024. The proceeds from the sale of our Custom Fluidpower business in the third quarter of 2025 accounted for $47.3 of the fluctuation. Capital expenditures were $23.7 during 2025, $3.3, or 12.2%, lower than the prior year. Capital expenditures for 2026 are forecasted to be approximately 3.75% to 4.75% of sales for improvements to manufacturing technology and maintaining and replacing existing machine capabilities.
Previous wording
Net cash used in financing activities totaled $78.4 in 2024, compared with net cash provided by financing activities of $57.9 in 2023. In 2024, repayments, net of borrowings, totaled $68.0. Cash paid for acquisitions in 2023 was primarily financed with borrowings on our credit facility. Borrowings, net of repayments, totaled $75.7 in 2023.
Current wording
Net cash used in financing activities totaled $121.9 in 2025, compared with net cash used by financing activities of $78.4 in 2024. In 2025, repayments, net of borrowings, totaled $94.9. Cash paid for acquisitions in 2024 was primarily financed with borrowings on our credit facility. Repayments, net of borrowings, totaled $68.0 in 2024.
Previous wording
Borrowings on our term loans and revolving credit facilities as of December 28, 2024, totaled $300.3 and $150.3, respectively. See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report for additional information regarding our credit facilities.
Current wording
Borrowings on our term loans and revolving credit facilities as of January 3, 2026, totaled $262.5 and $105.5, respectively. See Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report for additional information regarding our credit facilities.
Previous wording
In May 2024, $0.5 was paid to the former owners of Balboa Water Group in connection with payment due on the contingent consideration liability. The contingent consideration liability was revalued and final payment is due in 2025.
Current wording
In May 2024, $0.5 was paid to the former owners of Balboa Water Group in connection with payment due on the contingent consideration liability. The contingent consideration liability was revalued and final payment is payable in 2026.
Previous wording
We have historically declared regular quarterly dividends to shareholders of $0.09 per share. We paid dividends totaling $11.9 and $11.8 for the years ended December 28, 2024 and December 30, 2023, respectively. The declaration and payment of future dividends is subject to the sole discretion of the Board of Directors, and any determination as to the payment of future dividends will depend upon our profitability, financial condition, capital needs, acquisition opportunities, future prospects and other factors deemed pertinent by the Board of Directors.
Current wording
We have historically declared regular quarterly dividends to shareholders of $0.09 per share. We paid dividends totaling $12.0 and $11.9 for the years ended January 3, 2026 and December 28, 2024, respectively. The declaration and payment of future dividends is subject to the sole discretion of the Board of Directors, and any determination as to the payment of future dividends will depend upon our profitability, financial condition, capital needs, acquisition opportunities, future prospects and other factors deemed pertinent by the Board of Directors.
Previous wording
Information on our credit facilities, including future maturities, is presented in Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report. Our revolving credit facility with PNC Bank matures and is payable in full in June 2029; however, we may make earlier payments. Our term loan with PNC Bank is payable in quarterly installments of $3.8 million through March 2026, quarterly installments of $5.6 million through March 2028 and quarterly installments of $7.5 million thereafter through the maturity date of June 2029, at which time the remaining balance will be due in full.
Current wording
Information on our credit facilities, including future maturities, is presented in Note 10 of the Notes to the Consolidated Financial Statements included in this Annual Report. Our revolving credit facility with PNC Bank matures and is payable in full in June 2029; however, we may make earlier payments. Our term loan with PNC Bank is payable in quarterly installments of $5.6 million through March 2028 with our next payment due December 2026 and quarterly installments of $7.5 million thereafter through the maturity date of June 2029, at which time the remaining balance will be due in full.
Previous wording
Interest rates on our credit facilities range from 4.9% to 7.2% as of December 28, 2024. Future interest payments are estimated to total $112.2, with annual payments ranging from $10.8 to $27.7 payable through the last maturity date of June 2029. Future payments assume the current interest rate environment, current currency exchange rates, future required payments on term loans and revolver borrowings consistent with December 28, 2024 debt levels. Future payments do not include an estimate of impacts from our derivative instruments.
Current wording
Interest rates on our credit facilities range from 3.7% to 5.5% as of January 3, 2026. Future interest payments are estimated to total $62.6, with annual payments ranging from $7.7 to $19.5 payable through the last maturity date of June 2029. Future payments assume the current interest rate environment, current currency exchange rates, future required payments on term loans and revolver borrowings consistent with January 3, 2026 debt levels. Future payments do not include an estimate of impacts from our derivative instruments.
Previous wording
We regularly place purchase orders with our suppliers for inventory and capital expenditures to be used in the ordinary course of business. Open purchase orders as of December 28, 2024 total $66.1 for purchases expected in 2025 and $0.4 for purchases expected in 2026.
Current wording
We regularly place purchase orders with our suppliers for inventory and capital expenditures to be used in the ordinary course of business. Open purchase orders as of January 3, 2026 total $48.0 for purchases expected in 2026 and $0.1 for purchases expected in 2027.
Previous wording
The Company is negotiating a lease-to-buy agreement for the purchase of a building with the option to purchase the building at any time during the lease period. Under the draft agreement, the company would commit to purchasing the building at the end of the 6-year lease term. The expected purchase price is €26.7; however, the actual purchase price will be reduced by 60% of the payments made during the lease term.
Current wording
The Company is negotiating a lease-to-buy agreement for the purchase of a building with the option to purchase the building at any time during the lease period. Under the draft agreement, the company would commit to purchasing the building at the end of the 6-year lease term. The approximate purchase price is €27.0; however, the actual purchase price will be reduced by 60% of the payments made during the lease term.
Previous wording
There are multiple steps in our process for testing goodwill impairment. The first step is identification of our operating segments, followed by the identification of the reporting units, such that the reporting unit has discrete financial information, its operating results are reviewed regularly by management, and its economic characteristics are different from the economic characteristics of the other components of the operating segment., As part of the annual test of goodwill impairment the Company considers economic factors and current business operations when assessing the reporting unit structures for the purposes of goodwill impairment testing. The reporting units comprised of our four prominent businesses and the 2023 acquisition of i3.
Current wording
There are multiple steps in our process for testing goodwill impairment. The first step is identification of our operating segments, followed by the identification of the reporting units, such that the reporting unit has discrete financial information, its operating results are reviewed regularly by management, and its economic characteristics are different from the economic characteristics of the other components of the operating segment. As part of the annual test of goodwill impairment the Company considers economic factors and current business operations when assessing the reporting unit structures for the purposes of goodwill impairment testing. The reporting units comprised of our four prominent businesses and the 2023 acquisition of i3PD.
Previous wording
The Company completed its annual goodwill impairment testing for 2024, 2023, and 2022, and determined that the carrying amount of goodwill for each reporting unit was not impaired. In addition, in management’s assessment of reporting units for GWI testing, it was determined that the two prominent Electronics businesses share very similar economic characteristics, are operationally interdepended, and should be aggregated and tested as a single reporting unit. The test for goodwill impairment was performed for each business and for the consolidated reporting unit. Neither test indicated any impairment.
Current wording
In 2024 and 2023 it was determined that the carrying amount of goodwill for each reporting unit was not impaired. In addition, in management’s assessment of reporting units for GWI testing, it was determined that the two prominent Electronics businesses share very similar economic characteristics, are operationally interdepended, and should be aggregated and tested as a single reporting unit. The test for goodwill impairment was performed for each business and for the consolidated reporting unit. Neither test indicated any impairment.
Previous wording
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. To the extent the Company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates. At December 28, 2024, valuation allowances against deferred tax assets were $2.3 million. Refer to Note 12 of the Notes to the Consolidated Financial Statements included in this Annual Report for additional information on the composition of these valuation allowances.
Current wording
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. To the extent the Company determines that it is more likely than not a deferred income tax asset will not be realized, a valuation allowance is established. The recoverability analysis of the deferred income tax assets and the related valuation allowances requires significant judgment and relies on estimates. At January 3, 2026, valuation allowances against deferred tax assets were $3.2 million. Refer to our Note 12 to our consolidated financial statements for additional information on the composition of these valuation allowances.