Greetings and welcome to the Helios Technologies Fourth Quarter 2024 Financial Results. 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, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tania Almond, Vice President of Investor Relations and Corporate Communication. Thank you. You may begin. Thank you, Operator, and good day, everyone. Welcome to the Helios Technologies Fourth Quarter 2024 Financial Results Conference Call. We issued a press release announcing our results yesterday afternoon. If you do not have that release, it is available on our website at hlio.com. You will also find slides that will accompany our conversation today, as well as our prepared remarks. Here with me is Sean Bagan, President, Chief Executive Officer, and Chief Financial Officer. Sean was promoted to President and CEO in early January of this year. The company is currently conducting a search for a new CFO. Also joining us is our Vice President, Corporate Controller, Jeremy Evans. Jeremy joined Helios in January 2024. Some of you have met him before either telephonically or at an investor conference. Sean will start the call with highlights from the 2024 Fiscal year, then hand it over to Jeremy to review our fourth quarter and Full-Year results. Sean will then conclude our prepared remarks with our 2025 outlook, financial priorities, and key focus areas. We will then open the call to your questions. If you turn to slide two, you will find our safe harbor statement. As you may be aware, we will make some forward-looking statements during this presentation and 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 those presented today. These risks and uncertainties and other factors have been provided in our 10-K filing filed in February 2024, as well as our upcoming 10-K 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 reconciliations of comparable GAAP with non-GAAP measures in the tables that accompany today's slides. Please reference slide three now. With that, it's my pleasure to turn the call over to Sean. Thanks, Tania, and welcome, everyone. We appreciate you joining us today. Before jumping into the fiscal 2024 results and our outlook for 2025, I would like to start with a few comments reflecting on the past year. We continued investing in innovative new products despite stubbornly depressed end markets that have pressured our top-line sales. Our most impactful product introductions in 2024 on the hydraulic side included launching 11 new cartridge valves, including an electro-proportional flow control valve and a commercialized Energen valve. On the electronic side, we launched PowerView U150 15-inch and PowerView U120 12-inch displays, SenderCAN Plus solution, and the PowerView U35 display. On the service and software side, we issued a press release last week highlighting the work our team at i3 Product Development did with Alto-Shaam, helping to rebuild their ChefLinc infrastructure, ensuring a more robust and scalable commercial kitchen solution. That solution also integrated our Cygnus Reach remote support technology, which empowers their service teams to not only provide real-time insights into oven performance, but can also diagnose issues remotely and address potential concerns before sending out a field technician. This is our first customer case study showcasing our entry into the commercial food service market. Our teams also stayed close to our customers in the regions we serve them, while actively showcasing our leading brands at trade shows across the globe. We drove operational efficiency and have been right-sizing our cost framework thoughtfully with year-over-year operating expense declines each of the last three quarters. For the year, we had record cash generation as we focused on our cash conversion cycle with a concerted effort to reduce inventory. We further strengthened our balance sheet and improved our financial flexibility by reducing and refinancing our debt that resulted in lowering our borrowing spreads. Despite hurricanes, challenging market conditions, and leadership changes, the global team united to support each other and, importantly, our customers while delivering on operational improvements that have enabled us to expand quarterly margins on softer revenue. I am incredibly proud of how my colleagues persevered through it all and humbled to be leading such an incredible team. Before I hand the call over to Jeremy, I would like to highlight that during my first year with the company in my CFO capacity, I prioritized building upon the strong foundation my predecessor had put in place. This included an assessment of the finance and accounting team, along with the structure to align them as business partners within the organization. Early organizational moves I made were to insert segment CFOs into the business and top-grading talent in both voluntary and involuntary attrition. Jeremy was my first strategic hire to top-grade our corporate controller position, bringing a wealth of experience from his 25 years at Tech Data, now TD SYNNEX. While there, his responsibilities scaled with the company over the decades across logistics, procurement, sales operations, finance, and accounting. His servant leadership management style, paired with his global mindset and experience in a larger organization, has made him invaluable to the company. I have relied on his expertise, and he has been a great business partner to our leadership team. Jeremy, over to you. Thanks, Sean. My first year serving as Corporate Controller at Helios has been an exciting one as I've learned about the company's exceptional brands and met many members of our astounding global team. I'm proud to be part of such a strong leadership group that has shown great collaboration this past year, navigating through internal changes and macro challenges in our industry. Now, turning to our fourth quarter results, please reference slides four through eight. Sales in the quarter were $180 million, landing the year just above the upper end of our recent guidance range. Market growth and health and wellness partially offset the continued weakness in the agriculture, mobile, and industrial markets, while recreational markets remained depressed below historical levels. Our fourth quarter is typically the seasonally weakest quarter in the year, given the holidays, and was also impacted in 2024 because of Christmas and New Year's being midweek. By region, sales in APAC continued to improve, driven by the strength of our Australian Custom Fluid Power business, helping to offset declines in EMEA and the Americas. As a side note, Custom Fluid Power, as a distributor, operates below our company's average margin profile. Foreign exchange unfavorably impacted sales by $100,000. For the quarter, gross margin expanded 150 basis points over last year, despite the 7% decline in sales. Likewise, for the year, while sales were down 4%, gross margin remained unchanged. This is a direct result of realizing targeted pricing benefits in combination with actions taken to improve productivity and takeout costs. Our objective is to return to the mid- to high-30% range for gross margin over time, predicated on volume growth. We have refined our focus on driving returns on invested capital and working to deliver growth targeting our historic margin profile. To achieve these goals, we are re-energizing our sales engine. This starts with a clear focus on the customers and channel partners who have been with us for decades and identifying how we can further cross-sell, as well as capture more share of wallet from our existing customer base. Beyond that, we will look to grow through markets that our leading products position us well to win by targeting new business to drive incremental growth. We are also using our mantra of continuous improvement on the way we innovate. To support this effort, we are simplifying the business and have reorganized the Helios Center of Engineering Excellence. We are moving the engineering expertise into our business segment operations and will close our facilities in San Antonio, Texas, by mid-year. We are pivoting the organization to drive a customer-centric, sales-oriented culture that leverages the strengths of our hydraulics and electronics engineering expertise, our high-quality product portfolio, and our solid customer relationships. Operating income in the fourth quarter grew 12% despite the decline in sales, and operating margin expanded 120 basis points to 7.4%. On an adjusted basis, operating margin of 13.3% was up 70 basis points from last year. This improvement was the result of a 7% reduction year-over-year in SG&A expenses, combined with strength in gross margin. Adjusted EBITDA margin expanded 70 basis points over the prior year period. Our effective tax rate in the fourth quarter was 37.2%, while the Full-Year effective tax rate was 22.8%. This came in higher than our guide due to a change in the income mix in the various tax jurisdictions, as well as some discrete items in foreign jurisdictions. As most of you realize, the effective tax rate is based on the full year, and quarters can vary based on discrete tax items from period to period. Diluted EPS was $0.14 in the quarter, up 40% over last year due to a one-time gain on insurance recoveries related to the 2023 fire and weather-related incidents at our Faster facility in Italy. Diluted non-GAAP EPS was $0.33 in the quarter, down 13% over last year. Fourth quarter EPS was negatively impacted by $0.04 compared to our guidance due to the higher effective tax rate and foreign exchange impacts. Starting on slide nine, I'll give more color by segment. Hydraulic sales declined 10% over the prior year period. This decline reflected weakness in agriculture and mobile end markets. Foreign exchange had an unfavorable $100,000 impact on segment sales. Keep in mind that our Sun Hydraulics business based in Sarasota, Florida, contended with the impacts of Hurricane Milton early in the quarter, combined with the previous two hurricanes before it. Our entire Sarasota operations lost production across 18 cumulative shifts. Hydraulics gross profit and gross margin contracted year-over-year 14% and 110 basis points, respectively, on lower sales volume. SG&A expenses were down 10% compared with the prior year period, demonstrating the assertive efforts of cost control and streamlining our business given the current demand environment. Operating income was down $3.5 million, reflecting the contraction in gross profit with offsetting SG&A cost control benefits. Please turn to slide 10, and we'll discuss the electronics segment. Year-over-year, electronics sales were relatively unchanged. Higher sales in health and wellness helped counter ongoing declines in mobile and industrial end markets compared with the same period last year. Our advanced new PowerView products made headlines during the quarter as we won a key position on select MasterCraft boats. Electronics gross profit increased $4.4 million on flat sales, while gross margin expanded 730 basis points over last year, reflecting operational improvements and lower material costs, while also leveraging lower-cost manufacturing in Mexico. SG&A expenses were contained year-over-year despite inflation, given the work on cost takeout. As a result, operating income measurably improved with stronger gross profit and stabilized SG&A expenses. Slide 11 shows we focused heavily on cash management this past year, as it was a cornerstone of the financial priorities Sean implemented when we started the year. Our efforts paid off with the free cash flow conversion rate of 244%. We generated cash from operations of $35.7 million in the quarter, a 6% improvement over the fourth quarter last year. We used that cash to meaningfully reduce debt and strengthen our financial flexibility. For the year, we achieved record cash from operations of $122 million. I commend the team's work, and optimizing cash flow will remain a focus for 2025. We reduced inventory in 2024 by $25 million, or 12%, a critical area for improving our liquidity and generating cash to reduce debt. Capital expenditures in the quarter were $7.4 million, or 4.1% of sales, and totaled $27 million for the year, or 3.4% of sales, as we prioritized projects based on returns. Our capital expenditure plans for 2025 will be focused on tooling, maintenance, and productivity enhancements that demonstrate evident returns on invested capital. Turning to slide 12, at the end of the fourth quarter, cash and cash equivalents were $44 million, and we had $352 million available on our expanded revolver. Despite sales contraction in the year, we reduced total debt by 14%, or $75 million, with consistent reductions over the last six quarters. Our net debt to Adjusted EBITDA leverage ratio is down to 2.6 times, and we expect to reduce this further throughout 2025. Given our strengthened balance sheet and improved financial flexibility, our capital deployment priorities are evolving. In the near term, we will continue to pay down debt and invest organically in innovation and productivity. In addition, we intend to continue to prioritize dividend payments, which we have consistently done for over 27 years. We're also pleased to announce our inaugural share repurchase program. The continued execution of our strategy and accompanying growth initiatives support our confidence in Helios' continued cash flow generation capabilities and improved earnings profile. The share repurchase program will complement our acquisition strategy and illustrates our continued commitment to a disciplined capital allocation strategy, delivering attractive full-cycle returns and maximizing value to our shareholders. I will now turn the call back to Sean to speak to our 2025 plans and initial guidance for the year. Sean? Thanks, Jeremy. Turning to slide 13, we are establishing our outlook for 2025 with sales in the range of $775-$825 million. While we expect that in general, markets should start to improve as we advance through the year, we are constructing our outlook cautiously to the extent they do not. We expect adjusted EBITDA for the year of $140-$165 million. This represents an adjusted EBITDA margin of 19% at the midpoint of the range. As the markets recover and our volumes grow, our capacity utilization will improve, resulting in enhanced margins. Touching briefly on tariffs, as part of our facility footprint and global supply chain, we have manufacturing operations in the Americas region, including Mexico, the EMEA region, and the APAC region, including China. We have been evaluating potential impacts and assessing our options under various scenarios. There are many potential outcomes of the tariff regulations, as well as several different approaches we could consider pursuing in response once we know what the final rulings will be. As an example, as we look at our electronics segment, we have proactively moved some manufacturing lines from Tulsa to Tijuana to take advantage of labor and overhead savings, which are currently being realized. We have the available capacity to move those lines back to Tulsa. This is just one example of a way we could address this issue depending on the final rulings. So we are analyzing our supply chain and footprint for each segment and each operating company. Of course, it may not be possible to anticipate all the outcomes yet in the highly fluid environment. Our in-the-region, for-the-region strategy and the capacity we have invested in over the last couple of years does provide us the flexibility to move relatively quickly to realign our supply chain footprint as needed. As signaled last quarter, we inform our forecasting process with a wide array of inputs. These include feedback from customers, market data, channel inventory levels, order bookings, competitive insights, historical performance trends, macroeconomic factors, and information from our public company customers' earnings presentations. Our order bookings remain mixed, especially in EMEA, with limited markets turning positive, but we see opportunities should the macro environment improve, as indicated in some data points. NFPA data and PMI data, as shown in our supplemental slides, are starting to either reflect or call for an improving environment starting at various points throughout 2025. Importantly, we remain confident in our market positions and customer relationships, so as economic conditions improve, we intend to benefit. We expect first-quarter sales in the range of $185-$190 million, down compared with the Q1 last year, but up sequentially from last year's fourth quarter. We believe some of the actions we are taking on the cost and simplification side will show up in the form of improved margins as we step through the year. We expect adjusted EBITDA margin in the range of 16%-17% in the Q1, which would be slightly behind last year's fourth quarter, with full compensation accruals coming back into the mix. As a reminder, the Q1 is typically our lightest in terms of cash flow. We expect the first half of 2025 volume to be challenged, while the back half of the year sales to increasingly grow on a year-over-year basis on lower comparables. When we factor in all of our inputs, including where we are in various trough cycles of our more challenged markets, the current indicated patterns in our order book, the downtick in distributor inventory levels, and the market indicators that are starting to improve or forecasted for improvement in 2025, we believe all of this supports our back half of the year will be slightly larger than the first half. Slide 14 provides some additional understanding of where we see our market and operational drivers by segment to supplement the consolidated view. Turning to slides 15 and 16, I believe our results in the fourth quarter and full year validate that the financial priorities we laid out at the beginning of 2024 remain sound and continue to be a strong guidepost as we start 2025. We were able to execute to varying degrees on four out of the five priorities. You will see we are setting the stage now with our 2025 key focus areas to address head-on how we re-energize our go-to-market strategies, structuring them with a customer-centric focus and an emphasis on new product development. You will see firsthand how the pace of new product launches will increase throughout 2025. We are streamlining our organization to capitalize on our customer relationships and industry know-how. Based on how much I have witnessed this team navigate together in the relatively short time I have been with Helios, I am confident in our ability to unlock profitable organic growth across the variety of end markets and applications that our highly engineered premium products are positioned to win. Continuous innovation and regular product launches are embedded into our corporate DNA, and we will probably continue that practice. We will invest more in developing our team as they are our most valuable asset. Finally, we are happy to announce a more sophisticated capital deployment mindset, focused on investments that drive the greatest returns, along with our inaugural share repurchase program aimed at delivering long-term shareholder value creation. Our board of directors has authorized the company to repurchase up to $100 million in shares, which we will start executing against this year. I will highlight that we continue to seek acquisition opportunities to accelerate our growth, as well as continually evaluate the makeup and footprint of our entire portfolio. Our goal is to maximize shareholder value through all forms. In closing, I am incredibly excited about our future and confident in our ability to continue executing on our commitments as we prepare to return Helios to growth. I would like to extend a heartfelt thank you to each one of the approximate 2,500 Helios employees across the globe and to all our partners, including suppliers and customers. Finally, thanks to all of you for joining our call, along with your interest and support. With that, let's open the line for Q&A, please. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation code will indicate the line is in the question queue. You may press Star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys. One moment, please, while we pull for questions. Our first question comes from the line of Chris Moore with CJS Securities. Please proceed with your question. Hey, good morning, guys. Thanks for taking a couple of questions. Yeah, maybe we can just start where Sean ended in terms of the kind of institutionalized the go-to-market. Just trying to understand if that's focused more on one segment than another. I think historically, hydraulics, more channel partners, electronics, more OEMs. Is it aimed in one specific area or kind of more broad brushed? Morning, Chris. Hey, morning, Chris. Thank you. Morning. [crosstalk] So yes, it would be broad-based, Chris, across the company. As you know, our company at Helios is a combination of great assets, great products that fulfill unique niche needs for our customers. And certainly, we have great product quality, very low warranty rates, outstanding engineers, outstanding product focus. But really, it's bringing that sales-driven culture to the organization across all of the companies. And we started that work last summer as we kicked off our long-range planning processes and really started very big picture in terms of identifying those markets that we feel entitled to win with our existing products that we either are not participating in or we expect we could go deeper. With the collection of the companies we have, there will be a tremendous amount of focus on cross-selling across both the segments and within the segments as well. And really get going deeper with our existing customers from a wallet share perspective. We have various customer examples. Many times we put out press releases about product wins that we have. And really, it's holding the sales team and our internal teams accountable to driving those new business wins. And at the end of the day, limiting the leaky bucket of customer losses, ensuring that we're satisfying the customer. So really putting that customer at the center of everything we do and back that up with a lot of metrics and accountability to really change the culture of the company to become much more sales-driven. Got it. I appreciate that. Maybe talk a little bit about the Alto-Shaam partnership. How significant is that in terms of leading to new opportunities within the commercial food service? Yeah, we're very excited about that. I'm sure you saw the press release. And if you didn't see the accompanying video, there's a great testimonial video in there as well to highlight that. Certainly, the company has been talking about entering the commercial food service market. And the interesting part of that opportunity is that's a software opportunity that could enable future hardware sales as well. We also have our first hardware win as well in the commercial food service that will begin shipping this year. So we're excited about that, but more so with the Cygnus Reach platform, how that can certainly disrupt and transform that back-end support of different businesses. Got it. And maybe just the last one from me. Obviously, very strong free cash flow in 2024. I'm not sure if you gave a number. Just trying to understand how you're thinking about free cash flow in 2025. Yeah. So as we highlighted, I mean, it was a record year for cash flow despite our sales being down almost $25 million. But really, it was a testament to those financial priorities and focusing on our cash conversion cycle. The biggest impact was our inventory reduction in 2024. We certainly are prioritizing those same financial priorities, but given the range of our guidance from a top to a bottom end, we'll likely change the trajectory of how we attack inventory. And obviously, AP would flow with that as well. But if we can get the growth out of the business with the improving returns, we expect to be able to generate not quite as much as we did last year, but close to that. And Jeremy, I know you got a couple of points to add to that. Yeah, thanks, Sean. Definitely, when we look at 2024, there was a big focus on taking down some of the inventory levels that had ticked up. You see that in the overall inventory reduction year over year. I think we have some room to take that a little lower, obviously aligning with the overall sales progression, and then CapEx, a big piece of that. We've guided, call it 3.25%-3.75% of sales, just making sure that we're managing that and really investing in those projects, those capital items that are going to give us the required return that we're expecting. Got it. I appreciate it. I will leave it there, guys. Thanks, Chris. [crosstalk] Thanks, Chris. Thank you. Our next question comes from the line of David Tarantino with KeyBanc Capital Markets. Please proceed with your question. Hey, good morning, everyone. Hey, good morning, David. Maybe just to build on the seasonality thoughts, could you give us some more color on what the outlook embeds here? It looks like we're starting from an unusually slow versus what the typical seasonality would suggest. So maybe could you give us what's informing the expectation for the second half to be stronger than the normal seasonality would suggest? Yeah. Morning, David. So from a seasonality perspective, the thing I've concluded since I've been here is we don't necessarily have seasonality. You can look at historical trends, but really the more impactful thing is the way our end markets have been performing. When you look at the U.S. ag market being down for four consecutive years, you look at the consumer pressure from interest rates and consumer confidence and our end market exposure to recreational products, marine, health, and wellness that are impacted by that. Those factors play a pretty significant impact, more so than just pure seasonality. We've got a little bit of that with the international footprint of the business where the summer months are always slow with our European business. That makes up almost a quarter of our total revenue out of Europe. And so generally, we're just not getting as much revenue in that third quarter from the European region. But what gives us more insight into the back half versus the first half this year is some of the things we highlighted in the prepared remarks in terms of our existing order trends and order books. Now, we have a big part of our business, as you know, that goes direct to OEMs. And those OEMs provide long-term forecasts to us. And we obviously triangulate that with what they're saying on their earnings calls, in addition to the other macro factors, PMI, what our NFPA is calling for. And so putting all of those factors together, that's what gives us the thesis that the back half can grow. And then when you look at it from a comparable perspective, obviously, we've got a much softer comp in 2025 for the back half of 2024 versus the first half. Jeremy? Yeah. The other thing I would add is we have a good portion of the business that goes through distribution as well. And we are constantly in touch with those distributors trying to understand inventory levels. And we did see a decline from Q3, Q4 in those distributor inventory levels, which was the first decline we've seen in four or five quarters. So probably needs to come down a little bit more, but definitely seeing that trend in the right direction. Okay, great. And then maybe just on the margins from a higher level, the midpoint, roughly flat versus last year. Could you walk us through the key puts and takes here, particularly around how some of the footprint-related inefficiencies abating should provide an offset? Yeah. So I think with the range of the guidance at the low end of the $775 million, obviously, that would be a contraction over the $806 million delivered in 2024, which would put a little bit of margin pressure. And that's where the low end of the EBITDA guidance at 18%. On the flip side, at the $825 million high end of the revenue guidance, EBITDA margin at 20%, which would imply an 80 basis points improvement on the bottom line. What I would point to is volume is the number one factor there, obviously, from an incremental and decremental perspective. If we continue to see contraction into this year for the third consecutive year, and as you know, the amount of capacity that was added starting about three years ago, that's probably when we would reevaluate the total capacity amount. Certainly, the tariff topic, which we haven't touched on other than in the prepared remarks, will play into that as well and how we respond. And so we potentially would solve some of the capacity as an outcome of the final rulings within the tariffs. And then maybe if I could sneak one more in just to put a finer point on the go-to-market strategy. Should we think about this changing anything with the previous kind of more systems-oriented approach, or is that relatively unchanged? I would say relatively unchanged. We're aspiring to be that preferred supplier to our customers. And what that entails is we need to be closer with them. We need to really understand their needs. We need to understand their needs before they understand their needs so that we can design and develop those products that will be valued to our customers and their end customers. As such, we still strongly believe in the ability for us to create system solutions, whether that's within the electronic segments by pairing multiple products together, controllers, distribution models, displays, wire harnesses, or on the hydraulic side with manifolds, valves, cartridge valves, couplers, bringing those all together in one system solution and software sitting across the top of that, as I mentioned, the Cygnus Reach software, in addition to all the great softwares we have within our electronic segments, not only at Enovation, but also at Balboa. Balboa Balboa has the ControlMySpa app that now will be also improved with our new products that we'll be launching. We've talked about some of them already, PureZone being one of them, and the water management side that's integrated with that ControlMySpa app. And on the Enovation side, some really cool new technologies when we talk about launching products that maybe customers don't even know that they want. We're pretty excited about that. And as we tried to allude to in the prepared remarks, we expect to accelerate the pace of new product development. And that's why the importance of our go-to-market strategy of having that sales-driven culture will be important to capitalize on those new products. And then finally, on the hydraulic side, I think you'll also hear throughout the year the new planned product launches that we think will drive incremental revenue. And that's, at the end of the day, what we try and do, bring in new products that are driving incrementality, not cannibalizing old existing product that's dated and aged within our portfolio. Great. Thanks, guys. Thank you. Our next question comes from the line of Mig Dobre with Baird. Please proceed with your question. Thanks. Good morning. Maybe we can go back to the Mexico discussion. My recollection is that your facility down there is an electronics facility that came with the Balboa acquisition. So a lot of your product and health and wellness is made there. And you've moved some production from Oklahoma down to Mexico as well. So if we do have tariffs, and let's say for argument's sake, it's 25% tariff, I guess two questions. Moving production back to Oklahoma, does that mean lower margin for the electronic segment on a kind of more sustained go-forward basis? And then for the product that you have there, the health and wellness product that was there to begin with, how do you sort of plan to address that? Is it that you're moving that production to the U.S. as well? Do you think the market can just cope with price increases to reflect these tariffs? What exactly is your strategy? Hey, Mig. Thanks for the question. Obviously, a topic we've been spending a lot of time evaluating and not making any definitive moves until rulings are in place and such. But yeah, I think the way you characterized it is a pretty clear understanding. I was just down in Tulsa here last month meeting with the team in terms of, you're right, we did move some lines, about five lines down to Tijuana from the Enovation side. That clearly we're benefiting from that cost benefit, not only on labor, but also overhead rates. And we could absolutely move them back to Tulsa. We have ample capacity to do that now. And then certainly the discussion would be of those products that we have manufacturing capability existing in Tulsa that are Balboa related. Those would be easy. So you think about SMT lines and things that we're really good at in Tulsa. Those are things that would be much easier to execute, but to your point, would likely come with an incremental cost from a labor and overhead perspective. And so then that gets into how are you going to deal with that? And certainly, that's engaging with our vendors and our customers. And more so on that health and wellness side, you look at our main competitor, who's a Canadian-based company. So they're going to be dealing with the same challenges as we are. And the footprint of the OEMs, for instance, the largest one, and there's multiple in Tijuana, but is right down the road from us. I think from an industry perspective, that's one that it's hard to envision not inflation coming in and cost going up to the end consumer ultimately paying that price. The other piece that maybe isn't as noticeable, and we did have a bullet in our 2024 year in review, is we acquired a company kind of at the onset of COVID called Joyonway in China. And what we've observed, absent the tariff, this is well before the tariff talk began, was that the health and wellness industry was exploding in terms of local OEMs. And for us, we used to export product from Mexico to China. And now 65% of Balboa branded products is now built in China for local customers. And again, two years ago, that was 0%. So I think what it could disrupt too is that whole supply chain, depending upon the cost benefit and things, you could actually see Chinese OEMs exporting more spas into the U.S. And so I think it's a real challenge for the OEMs to decide what they're going to do from a manufacturing perspective. But for us, our in the region for the region strategy is what differentiates us. And we can navigate quickly based upon, again, the final rulings because we have localized supply chains and such. So that's kind of at a high level how we're thinking about it, but know that we've got plans in place across different scenarios that we've been game theorying out as to the direction this could go. Okay. That's helpful. The second thing that maybe stood out to me in your outlook is the way you kind of structured the guidance for Q1. And we're looking here at revenues actually using the midpoint, I guess, being up sequentially, but margins compressing sequentially, right? You're going from, call it 17.4% to 16.5% on higher revenues. And I guess I'm wondering why that is the case. And then I'll have a follow-up to this. Yeah. I think one thing I'd point to is just the, and I think we had that in the prepared remarks, the incentive comp accruals where they come back in. You think about the fact that we didn't have a CEO other than an interim one and myself for the back half of the year last year. And then from an incentive comp perspective, because the subpar performance last year weren't at 100% targeted payouts, you flip to the new year and you start accruing at targeted levels. And so that's one of the biggest movers I would highlight. But we also, from a revenue perspective, I think you're referencing relative to the sequential comparison, but relative to the first quarter, it's down even more than that as well. And so hence a little bit more margin pressure. Yeah. The year-over-year one, I certainly understand it was the sequential that I was struggling with, but I appreciate the explanation. And then when you're sort of thinking about the cadence for the year, I recognize that the comparisons are strange and you sort of had the weather events as well that impacted 2024. So we're starting the year organically down about 10%. You're at the midpoint saying, "Okay, we're going to be flat for the year." At what point in time do you anticipate getting above that break even? Is it in Q2? Is it in the second half? If we're thinking about Q2, should we expect that to be down organically some amount? Yeah. I think you should. And I think that point, as we have it framed, is in Q3 where it would turn positive. But yeah, and I think that's partially that comment of first half, second half, the way we have it constructed right now. And again, trying to protect for that in our guidance that if that back half recovery doesn't materialize or it's later, trying to protect for that, which is a little bit of a wider range than we went into last year. So we have that $50 million range that we will expect to tighten as we get through the year. Okay. And final question for me on margin, and it's sort of a, I guess, longer term or medium term, I should say, question. You're guiding margins on flattish revenue relative to 2024. But if we're looking historically here, right, before you had these capacity additions, meaning back in, say, 2022, you did 23% EBITDA margin on $885 million of revenue. In the year prior, it was even better. It was even better. You were at 25% margin on $870 million. So if we're going to start to see a volume recovery here, if we're saying $840 million-$850 million of revenue, what's the right way to think about margins? Can we get back to that 23%-24% range, or do you have to do something incremental to the cost structure that you haven't done and you're not announcing yet in order to get you there? Yeah. Great question and one we model and project as well. So I think the first thing I want to point to is when the margins were in the mid-20s% or upper 23s, 24s, 25s%. Keep in mind again, that's when the Balboa business was about double what it is now of a business that has the highest amount of incrementals because of that very low cost structure. And that volume obviously is eroded, and we've added capacity in Mexico. So there's a big pressure point there. But how I would answer it is that $225 million range is back when we get into the low 20s%. And then as we can get to the $1 billion run rate, the $250 million, I think that's when we get back into the lower to mid-20s%. And we fully expect we can get our gross margins back into the upper 30s% with that. I think beyond that, it's looking at, again, across the whole portfolio and understanding that cost structure, and so we did announce on the call the one that was an acquisition in San Antonio, Texas, called HCEE, very, very talented engineers that have brought great innovation to us, but comes with a cost structure that's isolated away from the business, so the intent there is to integrate that back into the business. Don't lose the engineering mindset and such, but there's rooftop and kind of operating costs there that we feel can be leveraged with the existing infrastructure that we have across the building, and we've done a little bit of that within Europe as well. When you look at our U.K. operations, our German operations from a Sun Hydraulics perspective, our acquisition with NEM and the integration they're doing with Faster, so we're looking at all of those opportunities. But I'd still go back to volume as the number one thing here. And that's the importance of this go-to-market strategy to drive top-line growth. I'm sorry. One final follow-up on your comment about the billion-dollar revenue run rate to get to mid-20s EBITDA margins. In there, you were talking about Balboa and where Balboa was from a revenue standpoint relative to now. But arguably speaking, Balboa post-COVID experienced a bit of a mini bubble of demand, right? People were buying a lot of these home spas. This was not the only industry that experienced that COVID rush. So why is that the right way to think about capacity for that business? I mean, is it reasonable to expect demand to get anywhere back to where it was during that period? Or again, do you have to do something incremental to your cost base? Right. No, it would take years to get it back to that COVID bump because, again, it nearly doubled from when Helios purchased Balboa. It almost doubled during that COVID bump that was being referenced. When you look before COVID, historically, it's a very sleepy, low single-digit end market that grows. So how we're going to grow and win in that is with the innovative new product. You talked about the water sense and treat that we're launching and other things. But the capacity was added there in anticipation of the Enovation Controls moves that we did make in addition to the commercial food services opportunities that have been talked about extensively, and then other just electronic customer opportunities that we were expecting to materialize that haven't yet. And so at some point, if we don't have a view or tariffs change that situation, that could be one that ultimately is downsized. Thank you for taking my question. Thanks, Mig. Thanks, Mig. Thank you. Our next question comes from the line of Nathan Jones with Stifel. Please proceed with your question. Good morning, everyone. Good morning, Nathan. Hey, Nathan. [crosstalk] I'm going to start with a bit of a philosophical question about the portfolio. Under your two predecessors, Sean, there was a large transformation made within the company, a number of acquisitions made with the intention that you were going to move up the value chain, create systems and subsystems, and sell a lot of those to customers. That started nine years ago now, and there's been a lot of talk and a lot of promises made by the company about expanding into systems and subsystems. And frankly, not a lot of that delivered today. Does that strategy continue to make sense? Do you think Helios can leverage these products and these businesses to drive that value, this strategy that was started about nine years ago? Or do you guys need to consider whether Helios is the best owner for these businesses, whether having capital in these businesses makes the most sense for shareholders? Just thoughts on where the portfolio is today. Yeah. Well, most of the yes/no questions you asked throughout there, Nathan, because it is a loaded question, is yes, yes, and yes. So here's how I'm thinking about it. First and foremost, I mean, it's well documented, whatever. Half of acquisitions typically don't deliver upon the synergy plans or the strategic intent when you set out for them. And it's no secret that Helios acquired many companies over that time. From a strategic perspective, I'm all about the system solutions opportunity. And frankly, the companies that were purchased have great products. And to me, there's a tremendous amount more of value to be extracted that is just purely with synergizing sales teams, as I've talked about, back-end operations because of the cost structures of some of the businesses, and it hasn't been intentional integration efforts. So we're committed to all of that, but absolutely looking at the overall portfolio as well. And to your language, are we the best owner for these different businesses? If it isn't adding some sort of strategic value near-term or something that we have planned and it doesn't make sense, then absolutely it would be something we would look at over time. But on the flip side, given the strong returns and cash flow generation of the company, despite it being in a depressed end markets the last couple of years, we're still delivering a lot of cash. And so with getting our leverage ratio down, that's where we expect to look to, again, enhance that solution opportunities of what other products are missing from the portfolio or services or software. And so we will do an and, and, and approach on a lot of those questions. Jeremy? Yeah. Thanks, Sean. Just want to add that if you look at some of the Flywheel acquisitions, there was an intent to vertically integrate. If you look at companies like Daman and Schultes, Daman was a supplier of manifolds to the MCT organization. And through that, we created the center of excellence. And we still see opportunities there as the volumes come back to leverage that center of excellence. Another acquisition was NEM. That was a diversification effort to expand in the common cavity valve space. And we still see opportunities there. That's based in Europe, and we're seeing that starting to gain some traction here in the Americas as well. So definitely the vertical integration and the diversification strategy that drove some of those smaller Flywheel acquisitions is still in play. And we've got plans to continue to develop those and execute against those. Thanks for that. I guess this is a follow-up to Mig's question. The company, over the last couple of years, added, depending on when I asked you guys, so you were talking about something between $200 million and $400 million in capacity that was added. That's obviously not filled. The business had already been running at $900 million-ish a year. Add $300 million to that, you get $1 billion too. You guys should have plenty of capacity for quite a long time. Is that an area where we just need to wait for the volume to come back to fill that up, and you should continue to generate very high incrementals as that volume comes back? Or when do you need to take bigger cuts? And I guess this is probably somewhat of Mig's question as well. When do you need to take bigger cuts to some of that capacity and some of that expense that's been added to push that margin profile back up a bit more quickly? Yeah. That's the discussion I have consistently with our presidents that are running the day-to-day business. And I think the numbers you referenced are still sound. If not, well, it went up a little bit because of our sales shrinking by $25 million year over year. So in theory, we've got another $25 million of capacity there. But we believe in the organic growth plan and the go-to-market framework we're laying out that we believe we can continue to fill up that capacity. But it absolutely could change with the tariff rulings and how we would respond there. And then to the extent we see further declines in sales, I think naturally we would look at that. But right now, our plans are how do we fill the capacity up and get more leverage out of it because those incrementals are really, really strong as we've demonstrated a couple of times sequentially in quarters here in the more recent times. And as we get the top line going, we expect to benefit from that. And then the other point I would just want to highlight is that mix profile, although our overall hydraulics-electronics mix didn't really move year over year, two-thirds hydraulics, one-third electronics, that mix within the segments was unfavorable across both of them. You think about our Faster business, highly indexed to that ag market, being much more depressed, where actually our Sun Hydraulics business year over year grew Faster, higher margin than Sun. And then you go over to the Balboa and Enovation side, and Balboa is growing, Enovation shrinking, and the margin profile being just the opposite of that. So as we get that more optimized and we get some of those ag and rec marine end markets growing again, we think that can produce notable margin improvement as well. Maybe one last one on the tariffs and cost increases there. You talked about, I think you said it's hard to imagine that higher costs wouldn't get passed on to the consumer. In a number of those markets, you've already got a pretty weak consumer. So while you can raise prices to OEMs, OEMs can raise prices to consumers. How concerned are you that those price increases would then destroy demand and get lower revenue rather than lower margins? Well, and the comments for me is predominantly on our Balboa business because of that Mexico facility and that whole side, the earlier comment in the call. And I guess the one good thing for us is that's our smallest business of the four flagship brands. So from an overall impact to the company, if there was a pullback in demand, not as severe to the total company. But I absolutely think it will put pressure. But I also think it's going to drive supply chain changes. I talked about the China dynamic. Our leader for that Balboa business and our electronics president spent some time in Asia seeing our OEM customers, and we're blown away by the level of automation and sophistication and investments, frankly, that the Chinese are making into health and wellness facilities. And a lot of that volume today is being exported. The majority of the volume today is being exported to Europe. And so my earlier comment, I could see that creeping back into the U.S. as well. And so it may just shift where the product is made, still being able to limit some of the pricing pressure. But no doubt, at the end of the day, the consumer is going to feel some of that in the markets, at least that we serve from a consumer perspective. All right. Thanks very much for taking my questions. Thank you, Nathan. Yeah, thanks. And operator, do we have any other questions? I think we may be at the end of our time at most. Correct. There are no further questions at this time. Therefore, I will hand it back to you, Tania, for closing remarks. Okay, great. I appreciate it. And thank you so much, everyone, for your attention and your interest in Helios Technologies today. If you have any follow-up questions, please feel free to reach out to me. And we look forward to seeing you on the road soon. Have a great day. Thank you. And this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.