Helios Technologies, Inc. (HLIO) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Philippe Lemaitre, Chairman of the Board of Helios Technology. On behalf of Helios' Board and management, I welcome you to our 24th Annual Meeting of Shareholders. I will now call the meeting to order. In light of public health concern regarding COVID-19 and to protect our shareholders, Directors, officers, employees and families, we are holding our annual meeting virtually via webcast this year. The agenda for the meeting should be displayed on your screen. I will conduct this meeting in accordance with this agenda and the rules of conduct, which can be accessed via the Rule of Conduct link. We encourage you to review both documents, particularly the disclaimer printed on the bottom of the agenda regarding forward-looking statements and the procedures for voting, questions and technical issues outlined in the rule of conduct. Please note that the meeting is being recorded. However, recording the meeting or copying material presented at the meeting, including screen shots, is prohibited. The Board of Directors has appointed Melanie Nealis and Mary Kanary as independent inspectors of election, and they both have taken the required oath of office. Mrs. Nealis is Helios' Chief Legal and Compliance Officer. Mrs. Kanary is Helios' Administrative Services Manager. They will be assisted by other representatives of the company. The inspectors have informed us that 29,633,416 shares, representing 92.36% of the company's outstanding common shares are represented at the meeting either present virtually or by proxy. Accordingly, under the Florida Business Corporation Act and the company's bylaws, we have a quorum. The consolidated financial statement of the company and its subsidiaries, along with the report of Grant Thornton, our independent registered public accountants, are in the annual report, which was made available online on June 8, 2020. A printed copy of the annual report is available upon request. So now, I would like to introduce our Directors and leadership team who are virtually present today. First, the continuing Directors: Marc Bertoneche, Douglas Britt, Kennon Guglielmo and myself, Philippe Lemaitre. The nominees for Director; Laura Dempsey Brown, Cariappa (Cary) Chenanda, Josef Matosevic, Alexander Schuetz and Gregory Yadley. In addition to Josef, who is our President and Chief Executive Officer, the rest of the executive leadership team is comprised of Tricia Fulton, Chief Financial Officer; Melanie Nealis, Chief Legal and Compliance Officer and Secretary; Raj Menon, President, Cartridge Valve Technology; Jinger McPeak, President, Electronic Controls; Matteo Arduini, President, Quick Release Couplings. Also joining us today is Gus Hernandez from Grant Thornton, Helios' independent registered public accounting firm. So I declare this Annual Meeting of Shareholders has been properly called and convened in accordance with Florida Business Corporation Act and the company bylaws. On or about June 8, 2020, we sent a notice of Internet availability of our proxy material. This notice included the purpose of the meeting and was sent to the holders of record and beneficial owners of our common stock as of the record date of June 1, 2020. The record date was set by the Board of Directors for the purposes of determining the shareholders who are entitled to notice of and to vote at this meeting. Concurrent with the mailing of notice, we provided all the proxy materials, including the proxy card, proxy statement, financial summary and 2019 annual report on the Internet at the proxyvote.com site as well as our own website, heliostechnologies.com. During the meeting, if interested, shareholders can access the complete list of shareholders by clicking the Shareholders List link on the webcast portal. This list has been available for inspection during the past 10 days at the company's main office. The list shows that on the record date, there were 32,081,445 shares of common stock issued and outstanding. All other records required by law to be produced at this meeting are available for inspection. Mrs. Nealis, the Corporate Secretary, is taking minutes so that we will have a complete record of this proceeding. Only persons who are shareholders of record as of close of business on June 1, 2020, are entitled to vote. You do not need to vote during the meeting if you have already voted by telephone, Internet or mail. However, if you wish to change your vote or if you have not previously voted, you may vote online during the meeting. If you do wish to vote during the meeting, we encourage you to go ahead and do so now. The first item of business to come before the meeting is the election of Directors. The Governance and Nominating Committee of the Board has nominated Dr. Alexander Schuetz for reelection and Mrs. Laura Dempsey Brown and Mr. Cary Chenanda for election, all to serve until the company's annual meeting in 2023, until their respective successors should be duly elected and qualified or until their earlier resignation, removal from office or deaths. In addition, the committee has nominated Mr. Josef Matosevic and Mr. Gregory Yadley to serve until the annual meeting in 2021 or until their respective successors should be duly elected and qualified or until their earlier resignation, removal from office or deaths. No other nominations for the election of Directors were received. This proposal is properly presented to the shareholders for their consideration and votes. The next item of business is ratification of the appointment of Grant Thornton as the independent registered certified public accounting firm to report upon the financial statements of the company for the year which will end on January 2, 2021. This proposal is properly presented to the shareholders for their consideration and vote. As we have done in previous years, following passage of Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing our shareholders annually with the opportunity to cast an advisory vote on the compensation of our named executive officers as disclosed in the proxy statement. This proposal, commonly known as say-on-pay proposal, gives you the opportunity to express your views on our named executive officers' compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our executive officers and the philosophy, policies and practices described in the proxy statement. This proposal is properly presented to the shareholders for their consideration and vote. We will allow time now for anyone who has not yet done so, but wishes to cast a vote or change an earlier vote. If you are voting through the webcast portal, please submit your final votes now. [Voting]

By now, all shareholders have had a chance to vote. I declare the polls close at 10:10 a.m. Eastern or 9:10 a.m. Central. While the inspectors are finalizing the tabulation of votes, we will begin our Q&A session, and our President and Chief Executive Officer, Josef Matosevic, will now read and answer the pertinent shareholders' questions submitted.

Good morning, and thank you, Mr. Chairman. We will now begin the Q&A session. There have been no questions submitted. Mr. Chairman, I hand the call over to you.

Thank you. Inspectors of election will complete their tabulation of the votes on each item of the business submitted at this meeting, but preliminary results are available. I call upon Melanie Nealis to present the preliminary report of the inspectors of election.

Thank you, Mr. Chairman. On the proposal to elect Ms. Dempsey Brown, Mr. Chenanda and Dr. Schuetz as Directors for a 3-year term; and Mr. Matosevic and Mr. Yadley to serve for a 1-year term, each of the nominees for the Board of Directors received a plurality of the votes cast.

I, therefore, declare that Ms. Dempsey Brown, Mr. Chenanda and Dr. Schuetz have been elected as Directors to serve for term expiring on the date of the company's 2023 Annual Meeting. I also declare that Mr. Matosevic and Mr. Yadley have been elected as Directors to serve for a term expiring on the date of the company's 2021 Annual Meeting.

On the proposal to ratify the appointment of Grant Thornton as the company's independent registered public accounting firm for the year 2020, 29,515,206 shares, representing 99.63% of the shares present at the meeting and entitled to vote on the proposal were voted for ratification of the appointment.

I, therefore, declare this proposal adopted and approved.

On the advisory vote on the compensation of our named executive officers, 29,895,952 (sic) [ 26,895,952 ] shares, representing 97.68% of the shares present at the meeting and entitled to vote on the proposal, voted to approve on an advisory basis the compensation of the named executive officers as disclosed in the proxy statement.

Thank you. It was 26 million, not 29 million. The inspectors will furnish our secretary a written report of the final vote count regarding the matters voted on today which will be included in the minutes of the meeting. This concludes the scheduled business of the meeting. I now declare this meeting adjourned at 10:14 a.m. Eastern and 9:14 a.m. Central. I would like to express my sincere appreciation to the shareholders who participated in the virtual annual meeting as well as those who did not attend and voted by proxy. Finally, I wanted to take this opportunity to express my sincere thanks and gratitude to Ms. Christine Koski, who is retiring for the Board of Helios -- from the Board of Helios today after 20 years of dedicated service. We do appreciate all of her contributions and wish her the very best. Thank you to all, and goodbye.

This now concludes the meeting. Thank you for joining, and have pleasant, wonderful day.