All right, good afternoon, everyone. My name is Mig Dobre. I'm the Baird Analyst covering machinery and diversified industrials. It is my pleasure to introduce to you Helios Technologies. Helios is an electrical and hydraulic motion control provider. They leverage superior technology into through-cycle above-market growth rates. We're going to talk a lot about that. Joining us today, we have Interim CEO Sean Bagan. Sean, welcome. I know you have a couple of slides that you want to go through, so I'll turn it to you, and then we'll do some Q&A. Sounds good. Guess you can hear me all right? Thanks, Mig. Appreciate it and thanks to Baird for the outstanding conference. Appreciate all of your interest and familiarity with Helios. Just to start, I thought I would share a quick overview, and we have these materials on our website that provide a good background, but just start by saying Helios Technologies may be not a household name, but certainly our products go into all sorts of brands and different critical components for products that are very well known in the marketplace. We're both electronics and hydraulics business that is specific to motion control on the hydraulic side, and then electronic control technology on the electronic side. We're headquartered in Sarasota, Florida. The company was founded in 1970, 54 years ago, and up until, well, eight years ago. For the first 46 years, it was Sun Hydraulics, so the cartridge valve technology company. The board of directors and executive team made a decision to transform the company. Over the last eight years, over $1.3 billion have been deployed on M&A, and truly has transformed the company. Now within our electronics segment, we have Enovation Controls and Balboa Water Group as our two flagship brands. On the hydraulic side, in addition to Sun Hydraulics, there's Faster, a European coupling brand. When you look at our overall company, one big takeaway is it's very diversified, whether that's geographically. You can see about half of our sales are in the Americas, with a quarter roughly in Europe and a quarter in Asia Pacific. Or our end markets that we serve, we go to market through distribution and distributors, and also directly to OEMs. And then the end markets and end customers we serve are also very diversified. So that provides a nice balance across our portfolio. You can see about two-thirds of the sales are within hydraulics, a third in electronics, and this is a trailing 12 number of $820 million of revenue, about $1.8 billion of market cap. All right. Well, thank you for that introduction. I guess maybe where we should start, you know, you are the Chief Financial Officer, you're Interim Chief Executive Officer, as there's been a transition there. And I'm kind of curious your perceptions of the company, because you're relatively recent, even as CFO, right? So your perception of the company, how the CEO search process is going, I don't know if there's an update that you can share with us there. And then I'll have some follow-ups. Sure. Well, I'm not bored. I have two jobs. I imagine that, yes. But I'm really excited about the opportunities in front of us as a company. And I was attracted to Helios. I spent 23 years at my prior company, and so it wasn't lost on me to make that career move. But when the opportunity presented itself, I jumped at it. And I just think it's such a great company for in the small cap world when I look at the amount of opportunities and the diversification we have. And so I'm honored and privileged that the board had the confidence in me after just over a year to give me that interim role. What I think gave the confidence to the board is we have a really strong set of presidents that run our businesses. So we have three presidents, two on the hydraulic side and one on the electronic side. From that perspective, we have a very stable and strong management team, no turnover since the prior CEO departed. Specific to the search, so our chairman's here, but I'll address the question. If there's anything you want to add, please do, but we've engaged a top search firm, Spencer Stuart. When the transition happened, the board was very transparent that they're going to take their time and find the right person to lead Helios long term, and so kind of set out roughly a six-month timeframe to do that, so Spencer Stuart being engaged came actually to one of our board meetings, didn't sit through the meeting, but did get the exposure to the board and to the executive leadership team to really understand our culture, really understand our business, and try and find who that next best leader is. For me, I'm honored to be considered for it. I would like the role, but I'm 100% committed to the company long term, and if there's somebody better to run the company, I will definitely respect that and look to partner with them. That's excellent. You know, recently your business was also impacted by the hurricanes. So I'd love to hear a little bit of an update there in terms of not only the disruptions that occurred to your business, but where are you in the process of normalizing production and hopefully getting back on your feet? Yeah. So significant impact initially. For me, as a relatively new Floridian, I didn't understand the frequency of these hurricanes, and it's kind of like another storm's coming. I'm from the Midwest, and it's kind of like snowstorm's coming, but the severity of the last one that hit, so we sustained three within kind of a month, month and a half long period. The final one, Hurricane Milton, actually directly hit Sarasota where we're headquartered, and so it did disrupt our operations. We released our earnings last week and had kind of a summary slide on the impact. Cumulatively, we had to close our facilities for roughly 18 shifts across all of them. We have three manufacturing plants. Two of them are back fully operational. The third one had sustained a little more damage, and it also houses our engineering lab. So, from the perspective of production, we're back up and running, but certainly was disruption and very severe, I mean, to the local community and the amount of cleanup efforts still going on and really gut-wrenching with our employees. Fortunately, all of our employees were safe, but employees lost loved ones to the hurricane. So, very, very significant, and we're ready for hurricane season to be past us for the year. But you guys are back to being able to operate at what you would consider normal capacity at this point. We are, yep. Okay, that's good to know. You know, if we're talking disruptions, maybe the other thing to think about here is the outcome of the election. And you know, on the one side, now we certainly have certainty. We know what happens, and hopefully that allows everyone to better plan. But then on the other side, the Trump administration is pretty outspoken about using tariffs as a tool. What seems different this time around is that they're not just targeting steel, but they're talking about general tariffs, right? So my question to you is, I'm sure you've had your folks look internally and do some planning around this. When you look at your exposure, what percentage of your cost of goods sold, or however you want to frame it, what sort of exposure do you have to imported product, whether it's Mexico, whether it's China, or even Europe? Yeah, so those are the two geographies and as we listen to the tariff talk and rhetoric and speculation, where we've really looked is China and Mexico. From the perspective of China, the 301 tariffs, we've taken an approach as a company as we've grown globally and as we highlighted, half of our business roughly is outside of the Americas to be in the region for the region, meaning we localize our supply chains, our manufacturing and the reason for that is more to support the customer, be closer to the customer. The unique market needs are different, product needs are different across the markets, and so that helps insulate us a bit from the tariff because of the localized supply chain, so for instance, in China, we have manufacturing there for our Sun hydraulic valves. We've got an electronics manufacturing company called Joy onw ay that we acquired right before the pandemic. And then also have Faster distribution. And so we don't expect the Chinese tariffs as much of an impact because we're not importing so much. A little bit on electronics and their suppliers, the second tier suppliers. So from that perspective, from a Mexico perspective, we do have a maquiladora structure with our Balboa business. There's a plant in Tijuana. That was part of the thesis when we acquired Balboa Water Group was giving us low-cost manufacturing. And we've had a concerted effort with our electronics segment to bring some of the Enovation production from Tulsa, Oklahoma, to Tijuana. And so what I would highlight there is we kind of have dual manufacturing capability, whether it's in Tulsa, whether it's in Tijuana. There's a couple of things that we do in Tijuana that we don't do in Tulsa, for instance, injection molding. But we think we can react once it becomes more definitive. So you know, it sounds to me that you have the option to adjust your actual production footprint if that were to be the case. You know, how long in theory would it take for you to be able to make these moves? Is this something that can happen in a matter of months? Is it longer? I think it would depend on if we're completely 100% going to close down one factory and move it. Obviously, that would take a little bit longer. But from a capacity perspective, we have excess capacity in both facilities. And at the end of the day, a Balboa display is very similar to an Enovation display from the perspective of it's a circuit board and a display and the casing. So we have the capabilities and know-how and tools and equipment to do it. It would just be a matter of how quickly we want to ramp that up. Is there an impact to sort of think about in your hydraulics business as well? Not as much, we don't believe. Because a lot of the raw material product is commodity steels, aluminums. So for the most part, that's all, again, we have a supply chain in China for that, in the U.S. And so we're not importing that. Okay, so it sounds like maybe the potential impact here is relatively limited. And if there is going to be one, it's going to be primarily in electronics. And that's something that you can manage by shifting production shifts, production footprint. Yes. Okay, that's great. Maybe talking about hydraulics a little bit. This is a vertical that has struggled with customer production schedules. Maybe remind us a little bit in terms of where you are with your various exposures, right? I mean, you're exposed to construction guys, to ag. Yeah, there you go. That's a helpful slide there. Yeah, I've got a hydraulics end market slide here that will show. Excellent. So talk a little bit about what you're seeing across these various end markets. And look, I think everybody in this room knows that agriculture is experiencing a lot of pain. So that part is clear. What about the other ones? And you know, do you get the sense that even in ag, you as a supplier have been more heavily impacted relative to production because there's sort of an element of destock that happens at the OEM prior to them actually starting to cut production? Exactly. We are a leading indicator to that as the supplier to them. I think when I look at the overall hydraulics business, if you just hone in on Faster, that's where our ag exposure predominantly is. That's the coupling business. We supply all the large ag manufacturers, John Deere, CNH, AGCO, Kubota, and beyond. For us, a leading indicator is following them as well in terms of what are they doing with their production schedules. We also are looking at external markets, the ag barometers and such that help us see that. And so we've been in the sustained downward trend in that business. But what the Faster business has really done nicely is to diversify away from that, partially through M&A, but also now through construction and industrial markets that we've added over 200 customers over the last year and a half, that's helped diversify. They're small today, but they're helping. On the Sun Hydraulics side, it's much more indexed to the kind of mobile equipment, AWP type, anything that's a scissor lift, putting people in the air type products. For us, that business has been flat year over year, despite market indicators that it's down, and similarly, some of our customers having some production declines. We are part of the NFPA, the National Fluid Power Association that produces market statistics and shows 2023 was a down year. 2024 year to date has been a down year, so from a competitive market position, we feel pretty good that we've been able to hold flat through the first nine months despite declining marketplace there. Do you get a sense that it is just a timing issue or is it a, I don't know, share issue or something else involved? Part of it is, you'll remember, Mig, last year with our acquisition of Daman and then expanding that. It was a $30 million run rate company that makes manifolds. We strategically decided to move manifold assembly out of Sarasota and make a manifold center of excellence in Indiana. Now there's roughly $100 million throughput running through that. So a lot of change for a $30 million company that's now part of a public company and doubling the size of the facility, tripling the size of their output. So we created a little bit of a backlog last year, roughly $10 million as we exited 2023, partially due to the amount of change we put in that. So I think that's played a part of it. We've caught that back up. So that certainly helped as well this year. Understood. I think one of the stories that a lot of folks have been excited about, and I put myself in that bucket in hydraulics, is this whole concept of system sales, being able to take some of the technology that you have in electronics, put it together with hydraulics, and reach out to customers. You know, we've talked about this for a couple of years now, and we're yet to see tangible evidence that these system sales are occurring. Where are we in that process? And I think it would be helpful to explain how you go about selling this, right? Because I would imagine that this isn't something that you show up to Caterpillar, you sell that product in a day, and next week it shows up on the machine, on the dealer lot, right? Talk a little bit about the lead lag that normally occurs in these kinds of sales. Yeah, so to answer the question, since I've joined the company 15 months ago, anything that's been talked about is still in play. We haven't lost any of those opportunities. They are a long cycle. I came from an OEM world and know the product development cycle is typically three years for a new ground-up program, and so by the time you're getting specced into that and validated, I mean, even before that, you've got drawings up on the board and design that you got to be integrated in with the OEM, where it's almost like we're an extension of their engineering team as a key component supplier to the time of when you're actually doing the clay models and producing the vehicles and production verification builds. That's kind of a three-year cycle. And so we did put out a press release yesterday, not on the hydraulic side, but a subsystem solution on the electronic side with one of our long-term customers, MasterCraft Boats. That was a system solution for electronics, meaning the displays, the wire harnesses, the controllers, the power distribution modules. And so we are fully committed to that strategy. And part of our M&A, I think this highlights that of the companies we've acquired, makes us stickier, makes us more valuable to those customers. And so we believe that over time, this will become a very meaningful part of our revenue. And from that perspective, it allows us to not only go deeper with existing customers that maybe we're already selling couplings to from Faster, well, now why not sell them a manifold and a Sun valve? Ultimately, the full system solution, what you referred to, Mig, is with electrifying those hydraulics. Full control, owning the cab, we call it internally at the company. Yes, we're continuing to pursue them. We view that as a key part of our growth strategy longer term. Do you have a hard time penetrating at that level? And I'm just sort of thinking as to who else you would be bumping into. You know, all of a sudden, you're dealing with a Parker Hannifin, Danfoss. You know, these are guys that are way larger than you are. That's right. So how do you go and try to displace someone like that in winning this system business? So we lead with the product and the differentiation of our product. All of our products are typically very premium, allows us to hold our margins fairly well. But it's really the solution that we provide. They'll go deeper. They've got hoses, pumps, other things that are more commoditized in our view. And so we're trying to be very selective with the solution we're going with. But yeah, obviously, much bigger. We use the term we slay giants on a daily basis when we're going after. We're competing with much bigger companies. And we're supplying much larger organizations. So we always have to play a little bit bigger. And I think our products is the number one way we can do that because of the reputation, the brands, the quality. You look at our disclosures from a warranty perspective, failure perspective, very small. That's the way we always go, and we start with that. Can we also talk about the Energen hydraulic valves? You know, maybe for the benefit of the audience, explain what that is. I personally think it's a pretty exciting product. But I'm curious as to what the uptake is here, what makes it differentiated in your view, and your potential customers, what do they say about it? Yeah, so Energen, very exciting product for us. It's true electrification of hydraulics. And the benefit of an Energen valve compared to the Sun valve that you see there is that it captures the wasted energy through the hydraulic fluid. And with that wasted energy, by capturing that, it can power accessories. So it can power any sort of takeoff accessory from any piece of equipment. And so we see it as. Is that product unique to you guys? I mean, are there alternative solutions in the market? There are solutions in the market, but our testing of those products compared to ours, we have better energy capture from ours. Okay, so I'm sorry, I interrupted you on the customer perspective on it and how you market this. Yeah, so we're trying to identify those opportunities and then get the products similar to how we create a lot of our own opportunities by demonstrating that we came with the solution and then go and replicate it. So it's core to our kind of product platforming strategy going forward is identifying them, finding them, talking about the wins, and then driving it through throughout the rest. And that's also the time when we can bring in the other products as well to create those system solutions as well. You know, you were talking about sort of a three-year product cycle, and I remember hearing about system sales, Energen product from your predecessor about, I don't know, two to three years ago. Is it too optimistic to infer that as we think about the back half of 2025 and into 2026, we could actually see, hopefully, fundamentally, the volumes in hydraulics start to bottom out, but then as we enter that recovery phase, you can actually have incremental outgrowth coming from these initiatives that are finally starting to mature? Is that how you think about it? That's how we're thinking about it, absolutely, with the new products. And that's not the only one that we've had. We're investing heavily in the electrification of hydraulics. So yes. And with the Energen product right now, we have one case where it's with a power company in Florida that we're trying to really commercialize this and bring it to market. And so we're trying to almost relaunch Energen to create that next step-level growth for us. I recognize that this is sort of a very analyst-like question, and you might not want to answer it, but is there a way to kind of frame conceptually the opportunity for outgrowth that these products will eventually generate? So if we look at the market for hydraulic valves, it clearly has moved up to electrohydraulics. And so we see ourselves having a big opportunity to grow in that. But one data point that we've looked at is when we launch a new product, the time it takes to create its optimal revenue, it's between six and seven years. So it's not adopted quickly. It takes time. But as we're launching these new products, we view them as incremental and not cannibalizing the other sales entirely. Now, in some cases, there will be a little bit of that. But because we're entering new segments, new categories that we weren't in, we see that as the incremental piece. Okay. Flip into the cost side. You put a lot of capacity in a hydraulics business. So talk a little bit about that. I mean, that's really been one of the big factors in the second half of last year in driving some outsized margin compression in this segment. So how do you calibrate the excess capacity that you have and the challenges that you're clearly going to have starting 2025 with the longer-term opportunity that you seem to believe that you have here with these products coming online? Yeah. So the way I'd answer capacity, right now, we see roughly $200 million to $400 million of incremental revenue that could go through the existing manufacturing plants. Since I've joined. In hydraulics? Sorry, across the company. Across the company. Okay. I'm sorry. Yeah, you did say hydraulic. My apologies. Similarly, whether you're looking at electronics or hydraulics, we have excess capacity available in both. Since I've joined, there hasn't been one capital expenditure that's been approved for capacity. That was in play beforehand, and it was when the business was rampant at $885 million in 2022, headed towards the 2025 billion dollor targets that we had, so at the time, I don't think anybody would look back and say we made the wrong decision, but right now, the growth opportunities we see in front of us, we're not at the point where we would suggest we want to take capacity out of the system because we see a path for that growth. I think in addition, those CapEx that we have continued to spend, because we are still spending 3%-4% of our sales, have been targeted at operational efficiency, replacing old equipment, things that are margin improving, and you will see that from the back half of last year to the first half of this year, the step up in our gross margins, despite the fact that we have continued to have that top-line pressure, so we think we can grow into it. If we saw further contraction, that we may look at, hey, is there an opportunity to take some of that capacity out, but right now, we're managing it by, for instance, the rest of the year, we won't be working Fridays at the Faster facility in Italy. We're just going to take that day off because we have enough capacity and inventory to fulfill our sales for the balance of the year. So trying to take some of the measures that are less permanent right now until we see more signs that something would be contracted. Can we talk a little bit about electronics? And I'm sure you're going to have a slide here as well. Yep. All right, perfect. So electronics, it sort of feels like it's been also waves of end market movements here. Health and wellness was an end market that's done extraordinarily well coming out of COVID. And then we've seen a deep correction there. Remind us where we are in this specific vertical, because on your last quarterly call, it seems like something's starting to get a little bit better here. Is this just a function of, hey, listen, you know, we hit rock bottom, we de-stocked the channel, so there's that, or are you actually starting to see genuine demand recovery? Yeah, I would say we're not back to pre-COVID levels. When Helios purchased Balboa, it was a trailing 12-month roughly of $130 million of revenue. During the COVID timeframe, it ran up well over $200 million, and then last year in 2023, it was less than $100 million, so big swings in that we are growing, and the first half of this year, that was our revenue beat. It recovered a little faster than we thought, $2 million above our expectation for the first quarter and second quarter. The third quarter, it slowed and performed about as we expected. We didn't deliver any upside, but every quarter, it's grown, and we expect that through the fourth quarter as well, so there's a couple of things going on that are helping. It's normalizing back to pre-COVID levels, but in addition, there's some secular trends. You'd think cold plunge pools that really didn't exist a few years ago and are in play now, and then we've also taken a more aggressive approach in the water treat and sense side of the business. We partnered with a company called WaterGuru that's into the pool space already. Hadn't been able to make as much inroads into the hot tub spa segment. For us, we're the leading supplier into that for OEMs. Effectively, we make everything except the shell for a hot tub, all the other parts, controls, and such, and so we provided the distribution opportunity for WaterGuru and partnered with them on the product, so we see that as, again, an incremental opportunity that will help accelerate that growth and get it back to where it was. So it sounds like that's getting better. You know, the flip side of this is the recreational market, which is still pretty meaningful. What are you hearing from customers there? Because, you know, in some ways, it would seem that a lot of the problems that we had with channel inventory have started to be worked out or worked through, I should say. Yep. So yes, you know, what's your perspective? What are you hearing from OEMs? Yeah, I was just at a trade show in Tampa. And I would say the OEMs are actually fairly optimistic as we get into next selling season. And right now, as boat show season's kicking off, I think you get some of those early indicators. So the markets themselves have contracted for multiple years. And so for us, as we're lapping those comps, that's what gives us confidence that we can actually get some growth. And not only with the existing customers going deeper with them, getting a bigger share of wallet, but also the new opportunities that we've been pursuing. And particularly as we lead with product, as I mentioned, we've come out with some really good products across both of our electronics businesses. The one we put out yesterday is our new U120, U150 display product that is really a step-level change for the tow boat segment. And so, not only that, but the recreational products, we've seen some big corrections from them OEMs as well. And so we feel as interest rates have been higher for longer than we expected, and one rate cut isn't going to bring all those payment buyers back into the market. But if there are a couple more cuts, that could provide that customer coming back in and giving those OEMs more confidence to start building again. And as a supplier, we'll be on the leading edge of that. That's excellent. Unfortunately, we're out of time. Sean, thank you so much for your time in the presentation. Thanks, Mig. Thank you all.