This report on Form 10-Q contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended, and Section
27A of the Securities Act of 1933, as amended. The words "expects,"
"anticipates," "believes," "intends," "plans," "will" and similar expressions
identify forward-looking statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. We undertake no obligation to
publicly disclose any revisions to these forward-looking statements to reflect
events or circumstances occurring subsequent to filing this Form 10-Q with the
Securities and Exchange Commission. These forward-looking statements are subject
to risks and uncertainties, including, without limitation, those discussed in
this report and those identified in Part I, Item 1A, "Risk Factors" included in
our Form 10-K. In addition, new risks emerge from time to time and it is not
possible for management to predict all such risk factors or to assess the impact
of such risk factors on our business. Accordingly, our future results may differ
materially from historical results or from those discussed or implied by these
forward-looking statements. Given these risks and uncertainties, the reader
should not place undue reliance on these forward-looking statements.

                                    OVERVIEW

We are a global leader in highly engineered motion control and electronic controls technology for diverse end markets, including construction, material handling, agriculture, energy, recreational vehicles, marine and health and wellness.



We operate under two business segments: Hydraulics and Electronics. The
Hydraulics segment designs and manufactures hydraulic cartridge valves,
hydraulic quick release couplings as well as engineers complete hydraulic
systems. The Electronics segment designs and manufactures customized electronic
controls systems and displays for a variety of end markets including industrial
and mobile, recreational and health and wellness.

In November 2016, we announced a vision to achieve $1.0 billion in sales in
2025, through a combination of organic growth and acquisitions, and to deliver
operating margins in excess of 20%. In 2021, we augmented our strategy and
accelerated our growth plans to achieve the milestone of over $1.0 billion in
sales with top tier adjusted EBITDA margin of approximately 25% in 2023.

Underpinning our expectation of compounded annual growth of approximately two
times our market's growth rates, we have an active pipeline and a history of
acquiring companies with niche technologies, as well as strong profitability.

Recent Acquisitions

Our acquisition activity, driven by our strategic vision, has enabled us to diversify our product offerings and the markets we serve and expand our geographic presence. Prior to 2016, we operated primarily in the Hydraulics market with a small presence in electronics.



In January 2021, we acquired all of the assets of BJN Technologies, LLC, an
innovative engineering solutions provider that was founded in 2014. With the
acquisition, we formed the Helios Center of Engineering Excellence to centralize
our innovation and technology advancements to better leverage existing talents
across the electronics segment initially, and then throughout all of Helios.

In July 2021, we completed another flywheel acquisition with NEM S.r.l. ("NEM"),
an innovative hydraulic solutions company providing customized material
handling, construction, industrial vehicle and agricultural applications to its
global customer base, predominantly in Europe and Asia. NEM enhances the Helios
electro-hydraulic product offering, provides geographic expansion and adds scale
to address new markets.

In October 2021, we completed the acquisition of assets related to the
electronic control systems and parts business of Shenzhen Joyonway Electronics &
Technology Co., Ltd and its related entities (collectively, "Joyonway").
Joyonway is a fast-growing developer of control panels, software, systems and
accessories for the health and wellness industry. Joyonway operates from two
locations in China, Shenzhen and Dongguan, both of which are in the hub of
electronics and software development in China. This provides us a foothold for
electronics manufacturing in Asia.

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Global Economic Conditions

COVID-19 Update

We continue to experience impacts to our operations from the effects of the
COVID-19 pandemic. Most recently, at the beginning of the second quarter our
locations in China began to shut down periodically due to regulatory lockdown
measures associated with a COVID-19 outbreak.

We continue to face constraints on our ability to source certain electronic and
other components, which originated from the high demand for these products
caused by the pandemic. While we have been able to mitigate the majority of the
impact with our procurement efforts and production schedule adjustments, we are
experiencing delays in shipments as well as material and logistics cost
increases.

We are also facing some disruption to our workforce from the pandemic. While the
impact has not been significant, the absenteeism has caused labor inefficiencies
in production. The Omicron variant impacted fourth quarter labor efficiency, and
we continued to experience the effects through January 2022. Additionally, in
certain locations we are facing pressure from competitive labor markets;
however, to date we have been successful at minimizing the impact on our
operations.

We are closely monitoring the various laws, regulations and executive orders
that could impact future periods relating to government-imposed requirements
regarding mandatory testing for COVID-19 in the workplace and/or vaccination
requirements for employees. The Company has taken and is in the process of
taking necessary steps to comply with applicable requirements. At this time, we
do not believe there will be a material impact on our operations due to these
requirements.

Our outlook for the remainder of the 2022 fiscal year assumes the global economy
continues to recover; however, we cannot at this time predict any future
impacts. The Company continues to monitor developments, new strains and variants
of COVID-19 and government requirements and recommendations at the national,
state and local levels, as well as vaccine mandates, to evaluate whether to
reinstate and/or extend certain initiatives it implemented to help contain the
spread of COVID-19. Refer to Item 1A "Risk Factors" of our Form 10-K for
additional COVID-19 related discussion.

Russian Invasion of Ukraine



In February of 2022, Russia invaded Ukraine. As a result, several governments
have enacted sanctions against Russia and Russian interests. The conflict has
led to economic uncertainty and market disruptions, including significant
volatility in commodity and energy prices and credit and capital markets. We do
not have operations in the region, and less than 1% of our sales are to Russia
and Ukraine customers. In Europe we are experiencing increased energy and raw
material costs, logistics issues and reduced orders from customers who do
business in the region. The broader consequences of the conflict could impact
our business through increased inflation, further increases or fluctuations in
commodity and energy prices, further disruptions to the global supply chain,
reduced availability of certain natural resources and other adverse effects on
macroeconomic conditions.

Industry Conditions

Market demand for our products is dependent on demand for the industrial goods
in which the products are incorporated. The capital goods industries in general,
and the Hydraulics and Electronics segments specifically, are subject to
economic cycles. We utilize industry trend reports from various sources, as well
as feedback from customers and distributors, to evaluate economic trends. We
also rely on global government statistics such as Gross Domestic Product and
Purchasing Managers Index to understand macroeconomic conditions.

                                       21
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Hydraulics



According to the National Fluid Power Association (the fluid power industry's
trade association in the U.S.), the U.S. index of shipments of hydraulic
products increased 15.7% during the first quarter of 2022, after increasing
20.9% during 2021. In Europe, the CEMA Business Barometer reports that the
general business climate index for the European agricultural machinery industry
continues to fall but is holding at a positive level. The favorable index peaked
in June 2021 and has since continued to decline. The report further noted that
price increases and shortages on the supplier side continue to challenge the
industry heavily and many companies are planning a temporary production stop due
to a shortage of parts in the upcoming weeks. The Committee for European
Construction Equipment ("CECE") business climate index reports that the index
saw a large drop in March in 2022. Further noted was that incoming orders and
sales in Europe remain on a consistent growth path but that supply-chain
disruptions remain the greatest challenge for businesses.

Electronics



The Federal Reserve's Industrial Production Index, which measures the real
output of all relevant establishments located in the U.S., reports first quarter
2022 sales of semiconductors and other electronics components was flat over the
fourth quarter of 2021 after increasing consistently since the end of the first
quarter of 2021. The Institute of Printed Circuits Association ("IPC") reported
that total North American printed circuit board ("PCB") shipments decreased
11.7% in March 2022 compared with the same month last year; compared with
February 2022, March shipments grew 5.6%. The IPC also reported that North
American electronics manufacturing services ("EMS") shipments were up 2.3% in
March 2022 compared with the same month last year; compared with February 2022,
March shipments grew 14.3%. Demand continues to exceed supply for both PCB and
EMS products as the book-to-bill ratios were 1.05 and 1.44 in March,
respectively, as reported by the ICP. Further noted was the slowdown in incoming
orders in recent months, which indicates early signs of slowing demand.

2022 First Quarter Results and Comparison of the Three Months Ended April 2,


                             2022 and April 3, 2021

(in millions except per share data)


                                             Three Months Ended
                                     April 2, 2022        April 3, 2021       $ Change       % Change
Net sales                           $         240.5      $         204.8     $     35.7           17.4 %
Gross profit                        $          83.6      $          75.4     $      8.2           10.9 %
Gross profit %                                 34.8 %               36.8 %
Operating income                    $          42.9      $          34.6     $      8.3           24.0 %
Operating income %                             17.8 %               16.9 %
Net income                          $          30.5      $          22.6     $      7.9           35.0 %

Diluted net income per share $ 0.94 $ 0.70 

$     0.24           34.3 %



First quarter consolidated net sales totaled $240.5 million, an increase of
$35.7 million over the prior-year first quarter. Acquisition growth accounted
for $7.2 million of the increase and we experienced significant organic growth
of $28.5 million, 13.9%. Changes in foreign currency exchange rates compared to
the first quarter of 2021, had an unfavorable impact on sales for the quarter
totaling $4.7 million, 2.0%, and earnings per share by $0.02. Price increases
added $9.6 million to first quarter organic sales compared with the prior-year
period. Organic sales improved in all regions compared to the first quarter of
2021, with the Americas and Europe, the Middle East, and Africa ("EMEA") regions
growing 21.5% and 18.7%, respectively, and Asia Pacific ("APAC") expanding by
4.0%, excluding the impact of changes in foreign currency exchange rates. Sales
in most of our end markets improved over the first quarter of 2021, with our
mobile equipment and health and wellness end markets leading the growth.

                                       22
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Gross profit grew by $8.2 million in the first quarter of 2022 compared with the
first quarter of 2021 primarily due to increased sales volume. Gross margin
declined by 2.0 percentage points compared with the prior-year first quarter
driven by increases in logistics and raw material costs which were not fully
absorbed by the price increases. Material costs as a percentage of sales,
excluding pricing changes and acquisition-related sales, increased in the first
quarter by 4.1 percentage points compared to the prior-year first quarter. We
have passed on certain material and freight cost increases to customers by
implementing price increases.

Operating income as a percentage of sales increased 0.9 percentage points to
17.8% in the first quarter of 2022 compared to 16.9% in the prior-year period.
Acquisition related amortization declined $3.2 million as the sales order
backlog intangible acquired with the Balboa acquisition was fully amortized in
the second quarter of 2021. Improved leverage of our selling, engineering and
administrative ("SEA") level fixed cost base on the higher sales volume was
reduced by the gross margin level changes and increases in payroll and benefit
costs to support our operating growth.

                                SEGMENT RESULTS

Hydraulics

The following table sets forth the results of operations for the Hydraulics segment (in millions):


                              Three Months Ended
                      April 2, 2022        April 3, 2021       $ Change       % Change
Net sales            $         137.1      $         119.1     $     18.0           15.1 %
Gross profit         $          50.8      $          45.4     $      5.4           11.9 %
Gross profit %                  37.1 %               38.1 %
Operating income     $          31.6      $          28.1     $      3.5           12.5 %
Operating income %              23.1 %               23.6 %




First quarter net sales for the Hydraulics segment totaled $137.1 million, an
increase of $18.0 million, 15.1%, compared with the prior-year first quarter.
Acquisition-related sales accounted for $6.4 million of the increase and sales
from our organic businesses improved $11.6 million, 9.7%. Changes in foreign
currency exchange rates compared to the first quarter of 2021, had an
unfavorable impact on sales totaling $4.5 million. Price increases added $3.9
million to first quarter sales compared with the prior-year first quarter. Sales
growth benefited from continued end market recovery from the pandemic as we
experienced improved demand in the Americas and EMEA regions, as well as many of
our end markets driven by the mobile and industrial equipment markets.

The segment's supply chain continues to experience constraints on its ability to
source certain components. While the effect on sales has been mitigated by our
increased procurement efforts and production schedule adjustments, we estimate
that approximately $6.6 million of sales were delayed into future quarters due
to the supply shortages.

The following table presents net sales based on the geographic region of the sale for the Hydraulics segment (in millions):


                    Three Months Ended
            April 2, 2022        April 3, 2021       $ Change       % Change
Americas   $          43.1      $          34.3     $      8.8           25.7 %
EMEA                  52.9                 43.3            9.6           22.2 %
APAC                  41.1                 41.5           (0.4 )         (1.0 )%
Total      $         137.1      $         119.1


Demand in the Americas region improved during the first quarter of 2022 compared
to the prior-year first quarter as sales increased $8.8 million, 25.7%. Improved
demand and our recent acquisition in the region generated an increase in sales
to the EMEA region of $9.6 million, 22.2%, compared with the 2021 first quarter,
or 29.6% excluding negative impacts from foreign currency exchange rate
fluctuations totaling $3.2 million. Sales to the APAC region declined $0.4
million, 1.0%, compared with the first quarter of 2021, but improved 2.2%
excluding negative impacts from foreign currency exchange rate fluctuations
totaling $1.3 million.

                                       23
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In the first quarter of 2022, gross profit increased $5.4 million, 11.9%,
compared with the same quarter of the prior year primarily due to higher sales
volume. Changes in foreign currency exchange rates compared to the first quarter
of 2021 reduced gross profit by $1.5 million. Gross profit margin declined over
the same period by 1.0 percentage point to 37.1% as price increases and fixed
cost leverage on the higher sales were more than offset by increases in
material, logistics and labor costs and the unfavorable impacts from foreign
currency exchange rates. Material costs as a percentage of sales, excluding
pricing changes and acquisition-related sales, increased in the first quarter by
1.8 percentage points compared to the prior year first quarter.

SEA expenses increased $1.9 million, 11.0%, in the first quarter of 2022
compared with the same period of the prior year. SEA costs from our recent
acquisitions and increases in payroll and benefit costs were the primary
drivers. Additionally, the segment incurred $0.3 million in costs related to
various restructuring activities during the first quarter. Increased leverage of
our fixed cost base on higher sales led to SEA as a percent of sales decreasing
0.5 percentage points during the quarter to 14.0% compared to the 2021 first
quarter.

As a result of the impacts to gross profit and SEA noted above, first quarter
operating income increased $3.5 million, 12.5%, compared with the first quarter
of the prior year, while operating margin declined 0.5 percentage points to
23.1%.

Electronics

The following table sets forth the results of operations for the Electronics segment (in millions):


                              Three Months Ended
                      April 2, 2022         April 3, 2021       $ Change       % Change
Net sales            $         103.4       $          85.7     $     17.7           20.7 %
Gross profit         $          32.8       $          30.0     $      2.8            9.3 %
Gross profit %                  31.7 %                35.0 %
Operating income     $          20.5       $          18.3     $      2.2           12.0 %
Operating income %              19.8 %                21.4 %



First quarter net sales for the Electronics segment totaled $103.4 million, an
increase of $17.7 million compared with the prior-year first quarter. Price
increases added $5.7 million of sales to the 2022 first quarter compared to the
2021 first quarter. Changes in foreign currency exchange rates minimally
impacted sales for the quarter.

First quarter growth was primarily driven by improved demand in our health and
wellness and recreational end markets, as well as successful capacity
improvement initiatives. The segment's supply chain continues to experience
constraints on its ability to source certain electronic and other components.
While the effect on sales has been mitigated by our increased procurement
efforts and production schedule adjustments, we estimate that approximately
$11.0 million of sales were delayed into future quarters due to the shortages.

The following table presents net sales based on the geographic region of the sale for the Electronics segment (in millions):


                    Three Months Ended
            April 2, 2022         April 3, 2021       $ Change       % Change
Americas   $          77.7       $          65.0     $     12.7           19.5 %
EMEA                  11.8                   9.3            2.5           26.9 %
APAC                  13.9                  11.4            2.5           21.9 %
Total      $         103.4       $          85.7

During the first quarter of 2022, we experienced strong growth in all regions. Shipments to the Americas region improved during the first quarter of 2022 compared to the prior-year first quarter as sales increased $12.7 million, 19.5%. Sales to the EMEA and APAC regions increased by $2.5 million each compared to the 2021 first quarter.


                                       24
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First quarter gross profit increased $2.8 million compared with the first
quarter of the prior year, primarily due to the increased sales volume. Gross
profit margin for the same period decreased by 3.3 percentage points. The
segment continues to experience increases in raw material and freight and
logistics costs, due to high demand and shortages of materials in the market for
electronic and other components used in our products. We have been implementing
price increases, which have offset some of the impact. Material costs as a
percentage of sales, excluding pricing changes, increased in the first quarter
by 6.8 percentage points compared to the prior-year quarter. Additionally,
increases in overhead costs related to wages, depreciation, maintenance and
supplies also unfavorably impacted the results for the quarter compared to the
prior-year first quarter.

SEA expenses increased by $0.6 million in the first quarter of 2022, compared
with the first quarter of 2021. SEA costs as a percentage of sales decreased 1.8
percentage points to 11.9% in the first quarter of 2022 compared to 13.7% in the
prior-year first quarter from increased leverage of our fixed costs on the
higher sales, partially offset by an increase in personnel costs to support our
increase in operations.

As a result of the impacts to gross profit and SEA costs noted above, operating income increased $2.2 million during the first quarter compared to the prior-year period and operating margin declined 1.6 percentage points.

Corporate and Other



Certain costs are excluded from business segment results as they are not used in
evaluating the results of, or in allocating resources to, our operating
segments. For the first quarter of 2022, these costs totaled $9.3 million for
(i) transition costs for one of our executive officers of $0.3 million, (ii)
amortization of acquisition-related intangible assets of $7.0 million and (iii)
$2.0 million related to other acquisition and integration activities.

Interest Expense, net



Net interest expense decreased $1.0 million to $3.8 million in the first quarter
of 2022 compared with $4.8 million in the prior-year first quarter. The decrease
is primarily a result of lower debt balances during the first quarter of 2022.
Average net debt decreased to $410.8 million during the first quarter of 2022
compared with $431.7 million during the first quarter of 2021.

Income Taxes



The provision for income taxes for the first quarter of 2022 was 22.4% of pretax
income compared to 23.2% for the prior-year first quarter. These effective rates
fluctuate relative to the levels of income and different tax rates in effect
among the countries in which we sell our products.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES
Act") was enacted into law in response to the COVID-19 pandemic. The Company has
evaluated the various income and payroll tax provisions and expects little or no
impact to income tax expense. However, the Company is taking advantage of the
various payment deferments allowed and employee retention credits afforded by
the CARES Act and other similar state and/or foreign liquidity measures. The
CARES Act allowed employers to defer the deposit and payment of the employer's
share of Social Security taxes. We deferred 50% of the $1.7 million in payroll
taxes normally due between March 27, 2020 and December 31, 2020. We paid 50% of
this amount during the fourth quarter of 2021. The remaining balance will be
paid during the fourth quarter of 2022 and is included in the Accrued
compensation and benefits line item in the accompanying Consolidated Balance
Sheets.

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                        LIQUIDITY AND CAPITAL RESOURCES

Historically, our primary source of capital has been cash generated from
operations. In recent years, we have used borrowings on our credit facilities to
fund acquisitions. During the first three months of 2022, cash provided by
operating activities totaled $14.7 million. At the end of the first quarter, we
had $33.0 million of available cash and cash equivalents on hand and $159.4
million of available credit on our revolving credit facilities. We also have a
$300.0 million accordion feature available on our credit facility, subject to
certain pro forma compliance requirements, intended to support potential future
acquisitions.

Our principal uses of cash have been paying operating expenses, making capital
expenditures, servicing debt, making acquisition-related payments and paying
dividends to shareholders.

We believe that cash generated from operations and our borrowing availability
under our credit facilities will be sufficient to satisfy our operating
expenses. In the event that economic conditions were to severely worsen for a
protracted period of time, we would have several options available to ensure
liquidity in addition to increased borrowings. Capital expenditures could be
postponed since they primarily pertain to long-term improvements in operations,
operating expense reductions could be made and finally, the dividend to
shareholders could be reduced or suspended.

Cash Flows

The following table summarizes our cash flows for the periods (in millions):


                                                       Three Months Ended
                                             April 2, 2022           April 3, 2021        $ Change
Net cash provided by operating activities   $           14.7       $            15.1     $      (0.4 )
Net cash used in investing activities                   (2.7 )                  (7.5 )           4.8
Net cash used in financing activities                   (8.8 )                  (9.5 )           0.7
Effect of exchange rate changes on cash                  1.3                     2.6            (1.3 )
Net increase in cash                        $            4.5       $             0.7     $       3.8


Cash on hand increased $4.5 million from $28.6 million at the end of 2021 to
$33.1 million as of April 2, 2022. Changes in exchange rates during the three
months ended April 2, 2022 favorably impacted cash and cash equivalents by $1.3
million. Cash balances on hand are a result of our cash management strategy,
which focuses on maintaining sufficient cash to fund operations while
reinvesting cash in the Company and paying down borrowings on our credit
facilities.

Operating activities



Cash from operations totaled $14.7 million during the first quarter of 2022, a
decrease of $0.4 million compared to the prior-year period. Current quarter cash
earnings (calculated as net income plus adjustments to reconcile net income to
net cash provided by operating activities, excluding changes in net operating
assets and liabilities) increased by $6.9 million over the prior-year first
quarter. Changes in net operating assets and liabilities reduced cash by $7.3
million, compared to the prior-year first quarter, as higher working capital
levels were required to support our significant increase in operations.
Strategic investments in inventory reduced cash by $15.5 million and $10.8
million in the first quarter of 2022 and 2021, respectively. The increase in
inventory levels is primarily from supply chain challenges such as (i) making
earlier purchases of material to avoid shortages, (ii) inventory on hand that is
waiting on delayed components to complete and (iii) delayed orders by customers
after we have already started the production process. Days of inventory on hand
increased to 100 days as of April 2, 2022, compared with 81 days as of April 3,
2021. Changes in accounts receivable reduced cash by $17.4 million and $28.1
million in the first quarter of 2022 and 2021, respectively. Days sales
outstanding increased slightly to 57 days as of April 2, 2022 from 55 days as of
April 3, 2021, as our collection patterns remain fairly consistent with the
prior period.

                                       26
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Investing activities

Capital expenditures totaled $5.6 million for the first quarter of 2022, an increase of $0.6 million over the prior-year comparable period. Capital expenditures for 2022 are forecasted to be approximately 3%-5% of sales, for investments in machinery and equipment for capacity expansion projects, improvements to manufacturing technology and maintaining/replacing existing machine capabilities.



Cash provided from acquisition related activities in the first quarter of 2022
totaled $1.3 million, compared to cash used in the 2021 first quarter of $3.4
million.

Financing activities

Cash used for financing activities totaled $8.8 million during the first quarter
of 2022, compared with cash used of $9.5 million in the prior-year first
quarter. Repayments, net of borrowings, on our credit facilities totaled $4.3
million for the first quarter of 2022 compared to net repayments of $5.9 million
during the same period of 2021.

During the first quarter of 2022, we declared a quarterly cash dividend of $0.09
per share payable on April 20, 2022, to shareholders of record as of April 5,
2022. The declaration and payment of future dividends is subject to the sole
discretion of the board of directors, and any determination as to the payment of
future dividends will depend upon our profitability, financial condition,
capital needs, future prospects and other factors deemed pertinent by the board
of directors.

Off Balance Sheet Arrangements

We do not engage in any off-balance sheet financing arrangements. In particular, we do not have any material interest in variable interest entities, which include special purpose entities and structured finance entities.

Inflation



As more fully described in Item 2 above, we are experiencing supply shortages
and increasing material and logistics costs. Continued increases in the global
demand for the materials used in our products could result in significant
increases in the costs of the components we purchase, and we may not be able to
fully offset such higher costs through price increases. There is no assurance
that our business will not be materially affected by inflation in the future.

Critical Accounting Policies and Estimates



We currently apply judgment and estimates that may have a material effect on the
eventual outcome of assets, liabilities, revenues and expenses for impairment of
long-lived assets, inventory, goodwill, accruals, income taxes and fair value
measurements. Our critical accounting policies and estimates are included in our
Form 10-K, and any changes made during the first three months of 2022, are
disclosed in Note 2 to the Consolidated, Unaudited Financial Statements.


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