Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — Q3 2022 Earnings Presentation
24 slides from Hillman Solutions's earnings presentation, Nov 3, 2022
Slide 1: Quarterly Earnings Presentation Q3 2022
235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Quarterly Earnings Presentation Q3 2022
Slide 2: Forward-Looking Statements
2 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 PresBuilder Placeholder - Delete this box if you see it on a slide, but DO NOT REMOVE this box from the slide layout This presentation contains certain forward-looking statements, including, b
Slide 3: Q3 2022 Highlights
3 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 • Net sales increased 3.9% to $378.5 million versus Q3 2021 ◦ Hardware Solutions +11.0% ◦ Robotics and Digital Solutions ("RDS") (2.8)% ◦ Canada +15.6% ◦ Protective Solutions +5.7% (excl. COVI
Slide 4: Q3 2022 Operational Highlights
4 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Q3 2022 Highlights • Successfully implemented price increase (fourth increase in past 18 months) • Maintained average fill rates of nearly 96% for the year • Positioned for continued new busin
Slide 5: YTD 2022 Highlights
5 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 • Net sales increased 5.0% to $1.14 billion versus the 39 weeks ended September 25, 2021 ◦ Hardware Solutions +12.2% ◦ Robotics and Digital Solutions ("RDS") +1.3% ◦ Canada +7.8% ◦ Protective
Slide 6: Quarterly Financial Performance
6 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Adjusted EBITDA (millions $ and % of Net Sales) Top & Bottom Line Performance Net Sales (millions $) Adjusted Gross Margin (millions $ and % of Net Sales) Please see reconciliation of Adjusted
Slide 7: Q3 Segment Results
7 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Hardware & Protective Q3 2021 Q3 2022 Δ Thirteen weeks ended 9/25/2021 9/24/2022 Comments Revenues $261,456 $271,853 4.0% Price increases + lighter volume (HS & PS) Adjusted EBITDA $30,634 $28
Slide 8: YTD Segment Results
8 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Hardware & Protective YTD 2021 YTD 2022 Δ Thirty-nine weeks ended 9/25/2021 9/24/2022 Comments Revenues $775,514 $818,110 5.5% Price increases + flat demand (HS) and lower PPE sales (PS) Adjus
Slide 9: Revenue by Business Segment (Q3)
9 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Hardware & Protective Robotics & Digital Canada Revenue Thirteen weeks ended September 24, 2022 Fastening and Hardware $210,853 $— $39,578 $250,431 Personal protective 61,000 — 322 61,322 Keys
Slide 10: Revenue by Business Segment (YTD)
10 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Hardware & Protective Robotics & Digital Canada Revenue Thirty-nine weeks ended September 24, 2022 Fastening and Hardware $625,537 $— $121,710 $747,247 Personal protective 192,573 — 984 193,5
Slide 11: Capital Structure Supports Growth & Enables Healthy Fill Rates
11 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Capital Structure Supports Growth & Enables Healthy Fill Rates Total Net Leverage Net Debt / TTM Adj. EBITDA Please see reconciliation of Adjusted EBITDA to Net Income and Net Debt in the App
Slide 12: 2022 Outlook & Guidance
12 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 (in millions USD) Original Full Year 2022 Guidance Range (millions) Updated Full Year 2022 Guidance Range (millions) Revenues $1,500 to $1,600 $1,460 to $1,500 Adjusted EBITDA $207 to $227 $2
Slide 13: Key Takeaways
13 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Key Takeaways Price offsets lighter foot traffic; Focused on delevering Long-term Annual Growth Targets (Organic): Revenue Growth: +6% & Adj. EBITDA Growth: +10% Long-term Annual Growth Targe
Slide 14: Appendix
14 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Appendix
Slide 15: Investment Highlights
15 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Significant runway for incremental growth: Organic + M&A Management team with proven operational and M&A expertise Strong financial profile with 57-year track record Market and innovation lea
Slide 16: Who We Are
16 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Who We Are Notes: Figures may not tie due to rounding and corporate eliminations. Adjusted EBITDA is a non-GAAP measure. Please see page 17 for a reconciliation of Adjusted EBITDA to Net Inco
Slide 17: Representative Top Customers and Product Categories
17 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 #1 in Segment Representative Top Customers #1 in Segment #1 in Segment Key and Fob Duplication Personalized Tags Knife Sharpening Fasteners & Specialty Gloves Builders Hardware & Metal Shapes
Slide 18: Adjusted EBITDA Reconciliation (Q3)
18 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Thirteen weeks ended September 25, 2021 September 24, 2022 Net loss $(32,524) $(9,466) Income tax benefit (5,798) (5,679) Interest expense, net 11,801 14,696 Interest expense on junior subord
Slide 19: Adjusted EBITDA Reconciliation (YTD)
19 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Thirty-nine weeks ended September 25, 2021 September 24, 2022 Net loss $(44,879) $(2,537) Income tax benefit (11,023) (147) Interest expense, net 49,979 38,857 Interest expense on junior subo
Slide 20: Adjusted Gross Profit Margin Reconciliation
20 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Thirteen weeks ended September 25, 2021 September 24, 2022 Net Sales $364,480 $378,538 Cost of sales (exclusive of depreciation and amortization) 236,999 214,802 Gross margin exclusive of dep
Slide 21: Adjusted S&A Expense Reconciliation
21 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Thirteen weeks ended September 25, 2021 September 24, 2022 Selling, general and administrative expenses $110,447 $133,246 Adjusting Items (1): Stock compensation expense 5,280 2,485 Restructu
Slide 22: Net Debt & Free Cash Flow Reconciliations
22 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 As of September 25, 2021 December 25, 2021 September 24, 2022 Revolving loans $74,000 $93,000 $100,000 Senior term loan 851,000 851,000 844,618 Finance leases 1,715 1,782 4,826 Other financin
Slide 23: Segment Adjusted EBITDA Reconciliation (Q3)
23 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Thirteen Weeks Ended September 24, 2022 HPS RDS Canada Consolidated Operating Income (Loss) $7,113 $(14,094) $6,532 $(449) Depreciation & Amortization 18,440 10,284 1,145 29,869 Stock compens
Slide 24: Segment Adjusted EBITDA Reconciliation (YTD)
24 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q3 2022 Thirty-nine weeks ended September 24, 2022 HPS RDS Canada Consolidated Operating Income (Loss) $15,255 $4,198 $16,720 $36,173 Depreciation & Amortization 53,159 31,754 3,469 88,382 Stock Comp