Helios Technologies (HLIO) Drives Its Electronics Growth Story Off-Road

On September 1, Helios Technologies (NYSE:HLIO) unveiled a new platform that integrates Apple CarPlay and Android Auto into its Electronics segment, bringing smartphone connectivity to boats, ATVs, and off-road vehicles. This move comes three weeks after the company reported a strong second quarter, with the Electronics segment expanding gross margin by over 500 basis points and CEO Sean Bagan highlighting the move as a foundation for future connected capabilities.

The expansion of the No Roads platform, a joint effort between Enovation Controls and i3 Product Development, targets rugged, integrated displays and software with connected-product design. Electronics sales grew 19% in the second quarter to $85.5 million, with gross margin expanding to 34.6%, pushing operating income up 90% to $11.2 million.

Despite improved leverage, Helios still carries $105.4 million in revolving credit borrowings and $226.1 million in long-term debt, which limits its ability to fund platform expansion through acquisitions. Hedge fund ownership of Helios rose to 31 funds, while short interest remains low at 3.03% of the float, indicating a market that is not particularly concerned about the growth deceleration management has flagged for the rest of the year.