Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — Q4 2023 Earnings Presentation
25 slides from Hillman Solutions's earnings presentation, Feb 22, 2024
Slide 1: Quarterly Earnings Presentation Q4 2023
Quarterly Earnings Presentation Q4 2023 February 22, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that
Slide 3: Q4 2023 Financial Review
Q4 2023 Financial Review Highlights for the 13 Weeks Ended December 30, 2023 • Net sales decreased (0.8)% to $348 million versus the 14 weeks ended December 31, 2022; excluding the 14th week during 2022, net sales increased 3.8% from $335 million in 2022 to $348 million in 2023. ◦ Hardware Solutions
Slide 4: 2023 Financial Review
2023 Financial Review Highlights for the 52 Weeks Ended December 30, 2023 • Net sales decreased (0.7)% to $1,476 million versus the 53 weeks ended December 31, 2022; excluding the 53rd week during 2022, net sales increased 0.4% from $1,471 million in 2022 to $1,476 million in 2023. ◦ Hardware Soluti
Slide 5: 2023 Operational Review
2023 Operational Review Highlights for the 52 Weeks Ended December 30, 2023 • Successfully rolled out new business wins across product portfolio including a major rollout of rope and chain accessories with a top five customer • Continue to win new business with existing and new customers across busi
Slide 6: Q4 2023 Financial Performance
Q4 2023 Financial Performance Top & Bottom Line Net Sales Adjusted Gross Margin Adjusted EBITDA (millions $) (millions $ and % of Net Sales) (millions $ and % of Net Sales) $350.7 $347.8 $167.5 $152.3 $54.4 48.2% $45.0 43.4% 15.6% 12.8% Q4 2022 Q4 2023 Q4 2022 Q4 2023 Q4 2022 Q4 2023 Please see reco
Slide 7: 2023 Financial Performance
2023 Financial Performance Top & Bottom Line Net Sales Adjusted Gross Margin Adjusted EBITDA (millions $) (millions $ and % of Net Sales) (millions $ and % of Net Sales) $1,486.3 $1,476.5 $639.8 $652.5 $210.2 $219.4 43.0% 44.2% 14.1% 14.9% 2022 2023 2022 2023 2022 2023 Please see reconciliation of A
Slide 8: Performance by Product Category (Q4)
Performance by Product Category (Q4) Hardware & Protective Q4 2022 Q4 2023 Δ Fourteen/thirteen weeks ended 12/31/2022 12/30/2023 Comments New business offset by market volume + 53rd week in Revenues $255,803 $256,421 0.2% '22 Adjusted EBITDA $27,932 $35,777 28.1% Margin expansion from price/cost dyn
Slide 9: Performance by Product Category (YTD)
Performance by Product Category (YTD) Hardware & Protective 2022 2023 Δ 53/52 weeks ended 12/31/2022 12/30/2023 Comments Revenues $1,068,734 $1,074,619 0.6% Price + new business; offset by vol + 53rd week in '22 Adjusted EBITDA $108,638 $123,163 13.4% Margin expansion from price/cost dynamic Margin
Slide 10: Revenue by Business Segment (Q4)
Revenue by Business Segment (Q4) Hardware & Robotics & Canada Revenue (QTD) Protective Digital Thirteen Weeks Ended December 30, 2023 Fastening and Hardware $206,583 $— $29,237 $235,820 Personal protective 49,838 — 1,523 51,361 Keys and key accessories — 45,236 2,201 47,437 Engraving and Resharp — 1
Slide 11: Revenue by Business Segment (YTD)
Revenue by Business Segment (YTD) Hardware & Robotics & Canada Revenue Protective Digital 52 Weeks ended December 30, 2023 Fastening and Hardware $865,212 $— $140,699 $1,005,911 Personal protective 209,407 — 6,997 216,404 Keys and key accessories — 193,212 8,711 201,923 Engraving and Resharp — 52,18
Slide 12: Capital Structure
Capital Structure Leverage Continues to Improve December 30, 2023 Total Net Leverage ABL Revolver ($247 million capacity) $— (Net Debt / TTM Adj. EBITDA) 5.0x Term Note $751.9 Finance Leases and other obligations $9.1 4.2x 4.2x 4.0x 4.0x 3.7x Total Debt $760.9 3.3x Cash $38.6 3.0x Debt Net Debt $722
Slide 13: 2024 Outlook
2024 Outlook 2024 Full Year Guidance On February 22, 2024, Hillman provided the following guidance based on its current view of the market and its performance expectations during the fifty-two weeks ended December 28, 2024. (in millions USD) Full Year 2024 Guidance Range Midpoint Revenues $1.475 to
Slide 14: Key Takeaways
Key Takeaways Resilient Business; Focused on Delevering & Acquisitions • Hillman celebrated its 60th anniversary in 2024, long-term track record of success; proven to be resilient through multiple economic cycles • Repair, Remodel and Maintenance industry has meaningful long-term tailwinds; near-rec
Slide 15: Appendix
Appendix 15
Slide 16: 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 17: 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 sit
Slide 18: 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 19: Adjusted EBITDA Reconciliation Q4
Adjusted EBITDA Reconciliation Q4 Fourteen/thirteen weeks ended December 31, 2022 December 30, 2023 Net loss $(13,899) $(10,059) Income tax expense (benefit) 1,916 (1,071) Interest expense, net 15,703 15,430 Depreciation 16,077 14,392 Amortization 15,551 15,576 EBITDA $35,348 $34,268 Stock compensat
Slide 20: Adjusted EBITDA Reconciliation 2023
Adjusted EBITDA Reconciliation 2023 53/52 Weeks Ended December 31, 2022 December 30, 2023 Net loss $(16,436) $(9,589) Income tax expense 1,769 2,207 Interest expense, net 54,560 68,310 Depreciation 57,815 59,331 Amortization 62,195 62,309 EBITDA $159,903 $182,568 Stock compensation expense 13,524 12
Slide 21: Adjusted Gross Profit Margin Reconciliation
Adjusted Gross Profit Margin Reconciliation December 31, December 30, Fourteen/thirteen weeks ended 2022 2023 Net Sales $350,663 $347,808 Cost of sales (exclusive of depreciation and amortization) 198,330 185,304 Gross margin exclusive of depreciation and amortization $152,333 $162,504 Gross margin
Slide 22: Adjusted SG&A Expense Reconciliation
Adjusted SG&A Expense Reconciliation December 31, December 30, Fourteen/thirteen weeks ended 2022 2023 Selling, general and administrative expenses $114,980 $116,234 (1) Adjusting Items : Stock compensation expense 2,735 2,893 Restructuring and other 1,136 4 Litigation expense 3,889 — Transaction an
Slide 23: Net Debt & Free Cash Flow Reconciliations
Net Debt & Free Cash Flow Reconciliations Reconciliation of Net Debt As of December 31, 2022 December 30, 2023 Revolving loans $72,000 $— Senior term loan 840,363 751,852 Finance leases and other obligations 6,406 9,097 Gross debt $918,769 $760,949 Less cash 31,081 38,553 Net debt $887,688 $722,396
Slide 24: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Fourteen Weeks Ended December 31, 2022 HPS RDS Canada Consolidated Operating Income (Loss) $5,350 $(113) $(1,517) $3,720 Depreciation & amortization 19,107 11,363 1,158 31,628 Stock Compensation Expense 2,364 231 140 2,735 Restructuring 985 151 — 1,136 Litigat
Slide 25: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations 53 Weeks ended December 31, 2022 HPS RDS Canada Consolidated Operating Income $20,742 $3,541 $15,610 $39,893 Depreciation & amortization 72,266 42,905 4,839 120,010 Stock Compensation Expense 11,057 1,479 988 13,524 Restructuring 2,342 275 — 2,617 Litigation e