Greetings. Welcome to the Helios Technologies second quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tania Almond, Vice President of Investor Relations and Corporate Communications. You may begin. Thank you operator, good morning, everyone. Welcome to the Helios Technologies second quarter 2021 financial results conference call. We issued a press release yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides there that will accompany our conversation today. On the line with me are Josef Matosevic, our President and Chief Executive Officer, and Tricia Fulton, our Chief Financial Officer. They will spend the next several minutes reviewing our second quarter results, discussing our progress with our accelerated growth goals, reviewing our recent NEM acquisition, updating our outlook for the rest of 2021, and then we will open the call to your questions. If you turn to Slide 2, you will find our safe harbor statement. As you may be aware, we will make some forward-looking statements during this presentation and also during the Q&A session. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from where we are today. These risks and uncertainties and other factors will be provided in our 10-Q to be filed with the Securities and Exchange Commission. You can find these documents on our website or at sec.gov. I'll also point out that during today's call, we will discuss some Non-GAAP financial measures which we believe are useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided the reconciliations of comparable GAAP with Non-GAAP measures in the tables that accompany today's slides. With that, it's now my pleasure to turn the call over to Josef. Tania, thank you, and good morning, everyone. Please turn to Slide 3, and I will summarize our highlights for Q2. Our team delivered another excellent quarter with strong sales and earnings surpassing our expectations at every level. I want to thank the entire Helios family for all of their hard work and tireless dedication to our customers. We have excellent operating momentum as we execute our augmented strategy and are on the right path to achieve our accelerated goal of $1 billion in revenue while delivering top-tier adjusted EBITDA margins by the end of 2023. That is two years earlier than our previous plans. We have very strong double-digit organic growth driven by serving our customers well and diversifying our market. In fact, we believe we are gaining market share as we provide industry best lead times. As we have been winning over the hearts and minds of our customers, we are focused on remaining flexible to meet their needs in this very volatile macro environment. In addition, we are bringing new products to the market at an accelerated pace to help make them more competitive as well. In total, we had 87% growth in the quarter, with 37% organic growth. In addition to driving the top line, we are gaining traction with our manufacturing strategy as well. This helped drive solid operating and EBITDA margin expansion. In fact, we posted the best margin results we have had in 3 years. We implemented targeted pricing strategies to help offset the continuing supply chain headwinds that the industry is facing, including higher freight costs, raw material price increases, and shortages of components. We are focused on cash generation with approximately $35 million of cash from operations in the quarter and 137% trailing 12-month free cash flow conversion. True to our growth strategy, we can very quickly delever the balance sheet while still funding our bolt-on acquisitions. We are making excellent progress with our acquisition strategy, too. Our most recent success is NEM, which we closed in less than 30 days. NEM is an innovative hydraulic solution company providing customized material handling, construction, industrial vehicle, and ag applications to its global OEM customer base. NEM is ideally located in northern Italy in a region which happens to be among the world's most innovative and technology-friendly area in the hydraulic industry. NEM enhances our electro-hydraulic product offering and provides us geographic expansion with greater global presence. The addition of the manufacturing and engineering capacity also provides us scale to address new markets. NEM has very strong brand recognition in hydraulics valve technology, and their deep application expertise will enable us to grow our OEM business. We could not be more pleased to have welcomed the NEM team into the Helios family. Given our outperformance, we are raising our full-year outlook again, which we will review in more detail later in our remarks. On slides 4 and 5, I will touch on some financial highlights for the quarter, then Tricia will go into more detail during her prepared remarks. Our second quarter net sales grew to over $223 million, of which $60 million was from acquisitions. Our adjusted EBITDA margin grew to 25.7% compared with last year, an increase of 310 basis points. Non-GAAP cash EPS was $1.20, an increase of 118% over last year, reflecting the better-than-expected performance of both segments. All in, the second quarter demonstrated strong execution by the entire company. I am incredibly proud of the Helios team and the excellent momentum we are building as we execute our augmented strategy to drive growth, generate cash, and deliver top-tier adjusted EBITDA margins. I will now turn the call over to Tricia to review the financial results and outlook in a little bit more detail. Tricia? Thank you, Josef, good morning, everyone. On slides 6 and 7, I will review our second quarter consolidated results. Let me start by saying that we heard your request for greater transparency on acquired revenue and are pleased to give you what you need to better understand our strong performance. You will find in our press release a table that shows organic revenue by quarter and the contributions of acquisitions. As Josef noted, we outperformed and delivered outstanding growth in the second quarter, supported by our focus on delivery lead times, our expanding sales channels, strong end markets, managing our operations efficiently, and our most recent transformative acquisition of Balboa, which exceeded our expectations again. Net sales grew 9% sequentially and 87% over the prior year period as we executed our growth plans and continued to take market share. Second quarter gross profit of $82.2 million increased $6.8 million or 9% compared with the trailing quarter, and $37.5 million or 84% for the prior year period from higher volumes. Gross margin of 36.8% was flat sequentially and year-over-year was impacted by improved fixed cost leverage on higher volumes, the difference from Balboa's margin profile, as well as supply chain challenges and increased material and freight costs. We are implementing multiple pricing strategies while also carefully managing the business to overcome the higher input costs. Manufacturing is performing well given the juggling act required to get product out the door. Our manufacturing operations are extremely flexible and agile in balancing available materials and staffing to ship products to our customers. Adjusted EBITDA margin grew to 25.7%, up 310 basis points from the same period a year ago and up 60 basis points compared with the trailing quarter, reflecting our disciplined cost management efforts, productivity improvements, and the contributions of Balboa. Non-GAAP cash EPS improved $0.21- $1.20 for the second quarter over the trailing quarter and was up $0.65 compared with the prior year period, reflecting strong demand across all industries and better than expected performance in the Balboa acquisition. Our effective tax rate in the second quarter was 17.6%, which was lower than expected due to the settlement of a transfer pricing dispute. Please turn to slide 8 for review of our Hydraulics segment second quarter operating results. Second quarter Hydraulics sales of $133 million were up 30% over the prior year period and benefited from broad-based improved demand in most of our end markets, showing growth in all geographic regions. Sales included a positive $6.7 million impact from foreign currency exchange rates. Q2 Hydraulics gross profit benefited from higher volume while margin increased 160 basis points to 38.3%, primarily driven by fixed cost leverage on higher sales and production labor efficiencies. These drivers were partially offset by rapidly increasing freight costs and efforts to provide deliveries on time to customers. The 280 basis point operating margin expansion to 24.3% compared with the prior year period reflects operating leverage on higher volumes as well as our disciplined execution on our manufacturing strategy. Please turn to slide 9 for review of our Electronics segment second quarter operating results. Electronics sales were $90.4 million, up from $17.2 million in the year ago period, reflecting an increase of 426%. Notably, we had very strong organic growth in this segment year-over-year. We are seeing the positive impact of the new product rollouts in the recreational market that we have been discussing for some time. By comparison, last year's second quarter was the most heavily impacted by the pandemic for this segment. Acquisitions contributed $60.2 million in revenue to our Electronics segment sales for the second quarter. In addition, Balboa continues to exceed our expectations. The capacity expansion investments we made have enabled Balboa to meet the ongoing growth and demand. We are very excited by the potential this acquisition has brought to our business. Electronics segment gross profit of $31.2 million in Q2 increased with the acquisition and higher volumes. Electronics gross margin was 34.5% and reflects the impact of mix primarily related to the different margin profile of the Balboa acquisition, as well as increased costs resulting from supply chain challenges to meet strong customer demand. Operating income for the Electronics segment of $19.6 million increased $1.3 million or 7.1% from the trailing first quarter and was up from $900,000 in the prior year period. Operating margin improved 30 basis points sequentially to 21.7% and was up from 5.5% in the prior year period. The 2021 second quarter margin reflects the strong operating leverage inherent in this segment. Please turn to slide 10 for review of our cash flow. Cash from operations was $34.5 million in the second quarter, up from $25.3 million in the prior year period. We are carefully balancing our working capital requirements with our efforts to provide timely deliveries to our customers amidst significant demand. For the quarter, CapEx of $5.3 million represented about 2% of sales. We are tightening our expected CapEx range to $30 million-$32 million for 2021, which remains approximately 4% of sales for the full year based on our updated outlook. Free cash flow was a strong $29.1 million at the end of the second quarter, equating to a trailing 12-month free cash flow conversion rate of 137%, as Josef mentioned. We are confident we have significant financial flexibility to further pursue our flywheel acquisition strategy. Regarding our capital structure on Slide 11, we continue to rapidly delever our balance sheet with a pro forma net debt to adjusted EBITDA leverage ratio of 2.16x. This continues to improve from the 3x at the end of 2020. Total debt was $437 million at quarter end, reflecting total repayment of more than $15 million during the quarter. At quarter end, we had $161 million available on our revolving lines of credit, with total liquidity of $196 million. As a reminder, our financial strategy is to increase leverage for disciplined acquisitions and then generate the cash to quickly pay that down. Our capital priorities remain debt reduction, organic growth through new products and technologies, acquisitive growth, and distributions to shareholders. We have been a consistent dividend payer over the last 24 years. We recently paid our 99th sequential quarterly cash dividend on July 20th of this year. Let's turn to slide 12, and I will discuss our outlook for the rest of 2021. Our guidance for 2021 assumes constant currency using quarter-end rates, as well as the assumption that our markets are not further impacted by the global pandemic. We are raising our revenue outlook for 2021 to the range of $800 million-$830 million, which implies an annual growth rate of approximately 56% at the midpoint of the range. Adjusted EBITDA margin outlook is increasing 50 basis points to 23.5%-24.5%. We continue to leverage our manufacturing efficiencies to offset stronger headwinds in the second half due to rising material costs. This implies we are raising our expectation for adjusted EBITDA dollars to the range of $188 million-$203 million, or a 61% annual growth rate at the midpoint of the range. We continue to invest through non-CapEx related items into our manufacturing strategy to reap the rewards of margin improvement over the long term. We are being cautious as we look at the second half of 2021. While demand across all of our served markets continues to be robust, we recognize that the supply chain challenges could disrupt our ability to continue to deliver at the pace that we have been. As a result, we are increasing the size of our guidance range from what was a $10 million range to now a $30 million range. Relative to our margin guidance, we are reflecting inflated material and freight costs continuing through the second half of the year, the challenges of obtaining parts and supplies, even as we build inventories, as well as the difficulties in staffing and balancing production lines. Interest expense outlook at current borrowing levels and rates remains unchanged and should be between $16 million-$18 million. Due to a favorable shift in the mix of earnings into geographies with tax advantage economic incentives, along with the favorable resolution of uncertain tax positions, the effective tax rate for 2021 is now expected to be in the range of 22%-24%, down from 24%-26%. Depreciation is now expected to be between $22 million-$23 million, and amortization is now expected to be approximately $32 million-$33 million. We are raising our Non-GAAP cash EPS outlook to between $3.60-$3.80 per share, or a 65% increase over the prior year at the midpoint of the range. The increase in our guidance for 2021 is driven by the strong end market demand we had in the first half of the year and expect to continue throughout the remainder of 2021. We are able to leverage our fixed cost base and maintain our strong margins, even given the headwinds on the supply chain, material costs, and logistics. With that, I will turn the call back to Josef for some final comments. Thank you, Tricia. Again, we are driving excellent performance, and I am extremely proud of our team. We are stepping up to the many challenges we are facing while driving amazing execution of our strategic plan. We are uniting efforts across the organization to deliver outsized growth and are confident in our ability to meet our long-term accelerated financial goals. With that, let's open up the lines for Q&A, please. Our first question is from Mig Dobre with Robert W. Baird & Co. Please proceed with your question. Good morning, everyone. Thank you for taking the question. I figured maybe I would start with your updated guidance, your top-line guidance. Your initial guidance had about a $10 million range. The range has actually widened to $30 million in your updated guidance. At least to me, it's a little bit counterintuitive since we're only dealing with 6 months left in the year. I'm kind of curious as to what's embedded in here in terms of the high end versus the low end. I'm also curious when I'm thinking of the midpoint, the $70 million increase at the midpoint, maybe what contributed that, if you can bucket it by the various segments or business line. Hi, Mig. Yeah, thanks for the question. In the guidance, we did expand the range quite a bit, which we agree with you is a little counterintuitive at this point. Given what we're seeing in the market, we thought that we needed to give ourselves a little bit of room. Certainly, on the high end, it shows the strong demand that we have in all of our end markets and all of our businesses. We're very pleased with where we are on order intake and the demand levels and where the market seems to be going. Because of the supply chain challenges that we're seeing across the businesses, but probably a little bit more on the electronic side, we felt that we needed to give ourselves a little bit of room in the event that we aren't able to get the parts in that we need to turn around the shipments in the third and fourth quarter. I think it is important to remember that the demand is there. It really just is a supply chain constraint problem that we're dealing with. Our supply chain teams are doing an excellent job of getting product in the door, but it is hand to mouth a lot on the parts for what we need to make in any given day. We're happy with where we are, but we don't see those clearing up before the end of the year. There's been some report that we may see some of them still into 2022. I think we have a pretty good handle on it, but there's still logistics issues and a few supply chain issues that are holding us back from being able to say that our top line is going to be at the high end of that range for sure. Yeah, that's helpful, and that makes a lot of sense. Are there any areas of your business where you're seeing more of a constraint? I'm thinking Electronics in particular, I'm wondering. Can you also help us out with any of the buckets as to the $70 million of revenue increase? Was that mostly Electronics, or was that Hydraulics as well? That'd be helpful. Thanks. It really was across the board, Hydraulics and Electronics. The split between the two segments for the first half is at the higher end of the range, what we anticipate that split will be for the second half as well. Where we're seeing supply chain constraints is across all the businesses, but specifically in Electronics, I think we've had probably more challenges than on the Hydraulic side. Some of it's components, some of it's things getting tied up in ports. We had shipments get lost in transit that were then found, but we aren't able to get those products in time to make the product according to the schedule that the customer wants from a delivery perspective. While we're seeing all of those things happen on the Electronics side, I don't think we're any different than anyone else in that regard. We're really pushing the supply chain teams to come up with creative ways to get us the products that we need. We're going out to the broker market when we need to. On the Hydraulics side, I think the constraints, some of it's material cost. Steel's going up, so that has some effect. The constraints, though, are really that our suppliers are very busy, because all end markets right now, whether it's ours or in other industries, are very strong. The suppliers are very busy as well. I see. Okay. Last question from me is on Balboa, where just the revenue traction that this business has had this year has been considerably higher than I think what we expected or modeled. I'm sort of curious here, in terms of what's driving the growth and how sustainable do you see this be? Is there any seasonality here to be aware of back half of the year relative to the first half? Thank you. Good morning, Mig Dobre. During our investor meeting here a few weeks ago, we pretty much laid out exactly what the path will look like for each of our businesses. In particular to Balboa, certainly the large piece comes from pent-up demand. You also heard us saying that we want to diversify into other markets. With the acquisition of BWG coming to our family here, they work collaboratively with Enovation Controls to develop the next-generation products and really have a good, better, best strategy and enter other markets that we're starting to see slowly but surely some traction. To summarize your question, clearly backlog and pent-up demand, combined with some diversification in new end markets and new customers. On the seasonality question, Josef? Look, as far as we can see right now, we have everything baked into our guidance for the remainder of the year. We continue to see a very strong order pattern. As we honestly get further educated with that business, we'll communicate accordingly, but we don't see that seasonality, quite honestly, at all right now. Okay. Thank you for taking the question. Thank you. Thanks. Our next question is from Nathan Jones with Stifel. Please proceed with your question. Yeah, good morning. This is Adam Farley on for Nathan. Hey, Adam. As you noted a couple of times that you're picking up market share by providing best-in-class lead times. Could you describe how you're able to maintain that advantage, and how does Helios believe it is generating better lead times than the peers and competitors? Look, great question, actually. On the Hydraulics side, north of a year ago, we took an effort here to clearly understand our investment strategy in manufacturing and what were the bottlenecks, if it's operations or supply chain or material flow. We really heavily invested not only in improving the processes, but also bringing some additional talent in. We knew that's an area that we can separate ourselves from the competition. The investment part, following by talent and education and lining up the supply base with our core competencies, and really having a strategy that collaborative working through this process got us to a point where we have folks actually at our suppliers, stationed on a weekly basis. We invested in that area. We knew we need to get better in that area, and we are holding extremely strong lead times. We have also put ourselves in a position to clearly understand where our customers are going and what will require for us to maintain our market share and gain market share. The notion of the strategy is the investment into manufacturing operations drove that result. Okay. Switching over to price costs. I know some contracts on the price side can be fixed, especially in Electronics. How is Helios able to negotiate any type of pricing from raw material inflation? Do you have any price increases planned or announced for the second half? Thanks. We do have pricing for the back half in all of the businesses to some degree. Like you said, those end up being a negotiation, especially on the fixed price contracts. We've been with many of our customers for so long that we have been able to go to them and get pricing even on the fixed price contracts related specifically to the material cost increases that we're seeing. Some of those go through as a price increase and some go through as a material surcharge. Some are temporary, some are permanent. Certainly, we have been able to have those tough discussions and get the pricing or surcharges through so that we can try to cover some of these increased material costs in the back half of the year. I think that's important to maintaining our strong margins. Okay. Thanks for taking my questions. Thank you. Our next question is from Jon Braatz with Kansas City Capital Associates. Please proceed with your question. Good morning, everyone. Jon Braatz, good morning. Morning, Jon. Tricia, in your commentary, you talked a little bit about the new platforms contributing to revenues in the Electronics segment. We've talked about that for the last 6 months, 9 months. How do you see that unfolding over the next 6 to 9 months? Are we just sort of seeing the tip of the iceberg in terms of the new platform contributions? Yes. At this point, we are just seeing the beginning of those rollouts. In the first year of any rollout, we clearly haven't reached a maturity level on that product. We roll them out slowly, make sure that we're meeting the commitments to our customers. Over time, those become very significant, especially on the electronic side. We've seen that with Enovation specifically because they have model year rollouts related to their recreational vehicles. We have had a couple that have started rolling out this year, but we have more to come in the back half of the year, and we're making sure that we have the parts in place to be able to make those products. That's been a key focus of the supply chain team. I think that we're ready to go on those, and we'll see them roll out. For the year, the total% of revenue that they're adding is not high. It's low single digit, but certainly as those mature, it will become a bigger contributor to revenue. How many different platforms do you see over the next couple quarters? Over the next couple quarters, we have what we would consider significant rollouts, probably 3 to 4- Okay. for the rest of this year. We do have others that are smaller and they're important as well and important to get them right, but from a revenue perspective, they have a little less impact. Okay. Josef, on the improved lead times, I would take it the improved lead times allowed you to take share from others because you were able to deliver the product. As the lead times improve maybe for your competitors, do you think you'd be able to retain that business, that new market share? Yeah. Certainly, Jon. Look, especially on the Hydraulics side, most of our products is shipped to distribution. We know our customers extremely well. We believe currently with anywhere between 6 to 7-week lead time, we clearly have job at hand. We feel comfortable we will maintain those lead times, and in some cases improve those lead times, too. On the OEM side, we also have very strong lead times if it's on the Faster business or our Electronics business. The differentiation there is, Jon, once you get specced into that process. Yeah. you are in for the next 3-5 years. It's very difficult to get out. We really invested wisely as a company in that area knowing that we could have a differentiation there and also protect our margins. To answer your question, we feel comfortable that we will maintain those lead times, but also we have other areas that we are working on that will further separate us from the competition. Okay. Josef, thank you very much. You bet. Thank you. As a reminder, if anyone has a question, you may press star one on your telephone keypad. Doing so will enter you to join the queue. Our next question is from Jeff Hammond with KeyBanc Capital Markets. Please proceed with your question. Hey, good morning. This is David Tarantino on for Jeff. Morning, Dave. Hello. Just starting out, you had pretty healthy incrementals of about 40% in the quarter despite all the headwinds out there. Guidance implies a modest step down in the second half. Could you just go through the puts and takes in this outlook and how all the headwinds out there and seasonality of the business informs guidance? Yeah. I think it's difficult to say that there's seasonality this year, to be quite honest. With all of the demand in the markets that we're seeing across our end markets, I'm not sure that it's a normal seasonality year. Certainly we had good incrementals, especially with what we saw on the supply chain side. In the back half of the year, there are a couple things at play. We have less workdays. In the back half of the year, we're seeing some supply chain challenges that we believe are probably going to keep us from being able to perform at the level that we did at Q2. The positive part of that again, is really the demand that we're seeing in the end markets and the growth that we expect to continue in those end markets. It really is driven primarily by supply chain when you look at what the expectations are from a margin perspective and a revenue perspective in the back half of the year. Great. Thank you. You talked about it a little bit, but could you quantify the amount of price you took in Q2 and what you're expecting for price costs for the rest of the year? Thank you. We did put through a few selective price increases on specific products in the first half of the year that really helped cover some of our costs that we were seeing on the cost increase side, but it's low single-digit millions for the year-to-date pricing impact. It's not a significant contributor to the first half of the year. It will likely be a larger contributor in the back half because we have a few price increases that are not rolling through until August, September, October timeframe. There will be some impact there. Those price increases really are put through more to help us offset the material cost increases and supply chain constraint issues that we're having. Great. Thank you. Thank you. We have reached the end of the question and answer session. I'll now turn the call over to Josef Matosevic for closing remarks. Thank you, operator. Well, thank you much for joining us today. We appreciate all of your interest in Helios and really look forward to updating all of you on our third quarter in November. We remain super confident in our ability to continue to grow and deliver value for all of our stakeholders. Have a great day and stay healthy. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.