Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — Q2 2024 Earnings Presentation
24 slides from Hillman Solutions's earnings presentation, Aug 6, 2024
Slide 1: Quarterly Earnings Presentation Q2 2024
Quarterly Earnings Presentation Q2 2024 August 6, 2024
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: Q2 2024 Financial Review
Q2 2024 Financial Review Highlights for the 13 Weeks Ended June 29, 2024 • Net sales decreased (0.2)% to $379.4 million versus Q2 2023 ◦ Hardware Solutions increased +2.7% ◦ Protective Solution increased +7.7% ◦ Robotics and Digital Solutions ("RDS") decreased (8.0)% ◦ Canada decreased (10.1)% • GAA
Slide 4: Q2 2024 Operational Review
Q2 2024 Operational Review Highlights for the 13 Weeks Ended June 29, 2024 • Continued taking great care of customers: ◦ Fill rates averaged 95% during Q2 2024 ◦ Fill rates averaged 94% for the year to date period • Secured $10 million new business with Koch in the newly acquired rope and chain cate
Slide 5: Q2 2024 YTD Financial Review
Q2 2024 YTD Financial Review Highlights for the 26 Weeks Ended June 29, 2024 • Net sales were comparable at $729.7 million versus $729.7 million in the first half of 2023 ◦ Hardware Solutions increased +3.6% ◦ Protective Solution decreased (0.1)% ◦ Robotics and Digital Solutions ("RDS") decreased (8
Slide 6: Quarterly Financial Performance
Quarterly Financial Performance Top & Bottom Line (vs Q2 2023) Net Sales Adjusted Gross Margin Adjusted EBITDA (millions $) (millions $ and % of Net Sales) (millions $ and % of Net Sales) $380.0 $379.4 $184.8 $163.5 $68.4 $58.0 48.7% 43.0% 18.0% 15.3% Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024
Slide 7: Performance by Segment (Q2)
Performance by Segment (Q2) Hardware & Protective Q2 2024 Q2 2023 Δ Thirteen Weeks Ended 6/29/2024 7/1/2023 Comments Revenues $278,130 $268,794 3.5% Driven by Koch acquisition and new business Adjusted EBITDA $43,635 $27,847 56.7% Margin expansion from price/cost dynamic Margin (Adj. EBITDA/Net Sale
Slide 8: Performance by Segment (Q2 YTD)
Performance by Segment (Q2 YTD) Hardware & Protective Q2 2024 Q2 2023 Δ Twenty-six weeks ended 6/29/2024 7/1/2023 Comments Revenues $538,004 $522,645 2.9% Driven by Koch acquisition and new business Adjusted EBITDA $75,901 $46,726 62.4% Margin expansion from price/cost dynamic Margin (Adj. EBITDA/Ne
Slide 9: Revenue by Product Category (Q2)
Revenue by Product Category (Q2) Hardware & Robotics & Canada Total Revenue Protective Digital Thirteen Weeks Ended June 29, 2024 Fastening and Hardware $231,128 $— $40,603 $271,731 Personal Protective 47,002 — 1,195 48,197 Keys and Key Accessories — 45,164 2,008 47,172 Engraving and Resharp — 12,31
Slide 10: Revenue by Product Category (Q2 YTD)
Revenue by Product Category (Q2 YTD) Hardware & Robotics & Canada Total Revenue Protective Digital Twenty-six weeks ended June 29, 2024 Fastening and Hardware $445,518 $— $72,192 $517,710 Personal Protective 92,486 — 2,603 95,089 Keys and Key Accessories — 88,801 3,960 92,761 Engraving and Resharp —
Slide 11: Capital Structure
Capital Structure Leverage Continues to Improve June 29, 2024 Total Net Leverage ABL Revolver ($251.2 million capacity) $— (Net Debt / TTM Adj. EBITDA) 5.0x Term Note $747.6 Finance Leases and Other Obligations $11.8 4.0x 4.0x 3.7x Total Debt $759.4 3.3x 3.2x Cash $54.0 3.0x 2.9x Net Debt $705.3 TTM
Slide 12: 2024 Outlook & Guidance
2024 Outlook & Guidance 2024 Full Year Guidance - Update On August 6, 2024, Hillman provided an update to its full year guidance, originally provided on February 22, 2024. Full Year 2024 Guidance FY 2024 Guidance (in millions USD) Original FY 2024 Guidance Range Midpoint Revenues $1.475 to $1.555 bi
Slide 13: Key Takeaways
Key Takeaways Actively Executing M&A; Winning New Business; Strong Margin Profile • Business has 60-year track record of success; proven to be resilient through multiple economic cycles • Repair, Remodel and Maintenance industry has meaningful long-term tailwinds; expected increase in future home sp
Slide 14: Appendix
Appendix 14
Slide 15: 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 16: Hillman: Overview
Hillman: Overview Who We Are 2023: By The Numbers • We are a leading North American provider of ~20 billion ~245 million ~115+ million hardware products and solutions, including; Fasteners Pairs of Work Keys ◦ Hardware and home improvement Sold Gloves Sold Duplicated products ◦ Protective and job si
Slide 17: 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 18: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Thirteen weeks ended June 29, 2024 July 1, 2023 Net income $12,535 $4,545 Income tax expense (benefit) 5,114 (1,823) Interest expense, net 13,937 18,075 Depreciation 16,297 13,800 Amortization 15,249 15,578 EBITDA $63,132 $50,175 Stock compensation expense 3,656 3,405
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Twenty-six weeks ended June 29, 2024 July 1, 2023 Net income (loss) $11,043 $(4,587) Income tax benefit 4,631 (9,679) Interest expense, net 29,208 36,152 Depreciation 32,635 30,505 Amortization 30,503 31,150 EBITDA $108,020 $83,541 Stock compensation expense 6,485 6,04
Slide 20: Adjusted Gross Margin Reconciliation
Adjusted Gross Margin Reconciliation Thirteen weeks ended June 29, 2024 July 1, 2023 Net Sales $379,432 $380,019 Cost of sales (exclusive of depreciation and amortization) 194,672 216,499 Gross margin exclusive of depreciation and amortization $184,760 $163,520 Gross margin exclusive of depreciation
Slide 21: Adjusted SG&A Expense Reconciliation
Adjusted SG&A Expense Reconciliation Thirteen weeks ended June 29, 2024 July 1, 2023 Selling, general and administrative expenses $121,154 $111,452 (1) SG&A Adjusting Items : Stock compensation expense 3,656 3,405 Restructuring 879 1,440 Litigation expense — — Acquisition and integration expense 242
Slide 22: Net Debt & Free Cash Flow Reconciliations
Net Debt & Free Cash Flow Reconciliations Reconciliation of Net Debt As of June 29, 2024 December 30, 2023 Revolving loans $0 $0 Senior term loan 747,597 751,852 Finance leases and other obligations 11,759 9,097 Gross debt $759,356 $760,949 Less cash 54,016 38,553 Net debt $705,340 $722,396 Reconcil
Slide 23: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Thirteen weeks ended June 29, 2024 HPS RDS Canada Consolidated Operating income $20,043 $7,310 $4,233 $31,586 Depreciation & amortization 20,244 10,066 1,236 31,546 Stock compensation expense 3,052 333 271 3,656 Restructuring and other 63 100 716 879 Transacti
Slide 24: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Twenty-six weeks ended June 29, 2024 HPS RDS Canada Consolidated Operating income $29,291 $13,067 $5,532 $47,890 Depreciation & amortization 40,113 20,442 2,583 63,138 Stock compensation expense 5,389 613 483 6,485 Restructuring and other 612 357 901 1,870 Lit