Slide 1: Quarterly Earnings Presentation Q1 2023
Quarterly Earnings Presentation Q1 2023 May 9, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements All statements made in this presentation that are consider to be forward-looking are made in good faith by the Company and are intended to qualify for the safe harbor from liability established by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exc
Slide 3: Q1 2023 Financial Review
Q1 2023 Financial Review Highlights for the 13 Weeks Ended April 1, 2023 • Net sales decreased (3.7)% to $349.7 million versus Q1 2022 ◦ Hardware Solutions +7.8% ◦ Robotics and Digital Solutions ("RDS") +0.1% ◦ Canada (5.1)% ◦ Protective Solutions (21.1)% (excl. COVID sales) • GAAP net loss totaled
Slide 4: Q1 2023 Operational Review
Q1 2023 Operational Review Highlights for the 13 Weeks Ended April 1, 2023 • Reiterated guidance • Inventory reduced by $38 million during the quarter; reduced by a total of $124 million from the peak during June of 2022 • Fill rates averaged approximately 97% year to date • New business (with exist
Slide 5: Quarterly Financial Performance
Quarterly Financial Performance Top & Bottom Line Net Sales Adjusted Gross Margin Adjusted EBITDA (millions $) (millions $ and % of Net Sales) (millions $ and % of Net Sales) $363.0 $349.7 $149.7 $145.2 $44.0 $40.2 41.2% 41.5% 12.1% 11.5% Q1 2022 Q1 2023 Q1 2022 Q1 2023 Q1 2022 Q1 2023 Please see re
Slide 6: Performance by Segment (Q1)
Performance by Segment (Q1) Hardware & Protective Q1 2022 Q1 2023 Δ For Thirteen Weeks Ended 3/26/2022 4/1/2023 Comments Revenues $265,377 $253,851 (4.3)% Excluding COVID sales, revenues were flat Adjusted EBITDA $21,033 $18,879 (10.2)% Inflation from 2022 flowing through income statement Margin 7.9
Slide 7: Revenue by Product Category (Q1)
Revenue by Product Category (Q1) Hardware & Robotics & Canada Revenue (QTD) Protective Digital Thirteen Weeks Ended April 1, 2023 Fastening and Hardware $204,974 $— $31,221 $236,195 Personal Protective 48,877 — 1,613 50,490 Keys and Key Accessories — 48,548 1,941 50,489 Engraving and Resharp — 12,51
Slide 8: Capital Structure
Capital Structure Committed to Improving Leverage as Inventory Converts to Cash April 1, 2023 Total Net Leverage ABL Revolver ($209 million capacity) $67.0 (Net Debt / TTM Adj. EBITDA) Term Note $838.2 5.0x 4.7x Finance Leases and Other Obligations $6.4 4.5x 2023 Y/E 4.2x 4.2x Estimate Total Debt $9
Slide 9: 2023 Outlook & Guidance
2023 Outlook & Guidance 2023 Full Year Guidance - Reiterated On May 9, 2023, Hillman reiterated the following guidance (originally given on February 23, 2023) based on its current view of the market and its performance expectations for the fifty-two weeks ended December 30, 2023. (in millions USD) F
Slide 10: Key Takeaways
Key Takeaways Inventory Turning to Cash; Focused on Delivering; Expected to Benefit from Price / Cost in 2H 2023 • Business has 59-year track record of success; proven to be resilient through multiple economic cycles • Repair, Remodel and Maintenance industry has meaningful long-term tailwinds; reco
Slide 11: Appendix
Appendix 11
Slide 12: Investment Highlights
Investment Highlights Indispensable partner embedded with winning retailers Customers love us, trust us and rely on us Market and innovation leader across multiple categories Large, predictable, growing and resilient end markets Significant runway for incremental growth: Organic + M&A Management tea
Slide 13: Hillman: Overview
Hillman: Overview Who We Are 2022: By The Numbers • We are a leading North American provider of ~20 billion ~400 million ~120 million hardware products and solutions, including; Fasteners Pairs of Gloves Keys ◦ Hardware and home improvement Sold Sold Duplicated products ◦ Protective and job site gea
Slide 14: Primary Product Categories
Primary Product Categories Hardware Solutions Protective Solutions Robotics & Digital Solutions #1 in Segment #1 in Segment #1 in Segment Fasteners Construction Work Gear Gloves Key and Fob Duplication & Specialty Fasteners Personalized Knife Picture Builders Hardware Tags Sharpening Hanging & Metal
Slide 15: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Thirteen weeks ended March 26, 2022 April 1, 2023 Net loss $(1,887) $(9,132) Income tax benefit (892) (7,856) Interest expense, net 11,628 18,077 Depreciation 13,254 16,705 Amortization 15,521 15,572 EBITDA $37,624 $33,366 Stock compensation expense 6,018 2,637 Restruc
Slide 16: Adjusted Gross Margin Reconciliation
Adjusted Gross Margin Reconciliation Thirteen weeks ended March 26, 2022 April 1, 2023 Net Sales $363,013 $349,707 Cost of sales (exclusive of depreciation and amortization) 213,273 204,509 Gross margin exclusive of depreciation and amortization $149,740 $145,198 Gross margin exclusive of depreciati
Slide 17: Adjusted SG&A Expense Reconciliation
Adjusted SG&A Expense Reconciliation Thirteen weeks ended March 26, 2022 April 1, 2023 Selling, general and administrative expenses $114,538 $111,065 (1) SG&A Adjusting Items : Stock compensation expense 6,018 2,637 Restructuring 52 1,408 Litigation expense 1,010 260 Acquisition and integration expe
Slide 18: Net Debt & Free Cash Flow Reconciliations
Net Debt & Free Cash Flow Reconciliations Reconciliation of Net Debt As of December 31, 2022 April 1, 2023 Revolving loans $72,000 $67,000 Senior term loan 840,363 838,235 Finance leases and other obligations 6,406 6,367 Gross debt $918,769 $911,602 Less cash 31,081 34,750 Net debt $887,688 $876,852
Slide 19: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Thirteen weeks ended March 26, 2022 HPS RDS Canada Consolidated Operating (loss) income $(1,947) $7,402 $3,394 $8,849 Depreciation & amortization 17,057 10,483 1,235 28,775 Stock compensation expense 5,188 830 — 6,018 Restructuring 47 5 — 52 Litigation expense