Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — Q1 2024 Earnings Presentation
19 slides from Hillman Solutions's earnings presentation, May 7, 2024
Slide 1: Quarterly Earnings Presentation Q1 2024
Quarterly Earnings Presentation Q1 2024 May 7, 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: Q1 2024 Financial Review
Q1 2024 Financial Review Highlights for the 13 Weeks Ended March 30, 2024 • Net sales increased 0.2% to $350.3 million versus Q1 2023 ◦ Hardware Solutions increased 4.6% ◦ Canada up 0.5% ◦ Protective Solution decreased (6.9)% ◦ Robotics and Digital Solutions ("RDS") down (9.2)% • GAAP net loss total
Slide 4: Q1 2024 Operational Review
Q1 2024 Operational Review Highlights for the 13 Weeks Ended March 30, 2024 • Acquired and successfully integrated Koch Industries into Hillman ◦ Acquisition marks Hillman's entrance into rope and chain ◦ Signals Hillman is actively pursuing accretive M&A opportunities that leverage its unique moat
Slide 5: Quarterly Financial Performance
Quarterly Financial Performance Top & Bottom Line (vs Q1 2023) Net Sales Adjusted Gross Margin Adjusted EBITDA (millions $) (millions $ and % of Net Sales) (millions $ and % of Net Sales) 47.6% 41.5% 14.9% 11.5% Please see reconciliation of Non-GAAP metrics Adjusted EBITDA and Adjusted Gross Margin
Slide 6: Performance by Segment (Q1)
Performance by Segment (Q1) Hardware & Protective Q1 2023 Q1 2024 Δ Thirteen Weeks Ended 4/1/2023 3/30/2024 Comments Revenues $253,851 $259,874 2.4% Driven by new business and Koch acquistion Adjusted EBITDA $18,879 $32,266 70.9% Margin expansion from price/cost dynamic Margin (Adj. EBITDA/Net Sales
Slide 7: Revenue by Product Category (Q1)
Revenue by Product Category (Q1) Hardware & Robotics & Canada Total Revenue Protective Digital Thirteen Weeks Ended March 30, 2024 Fastening and Hardware $214,390 $— $31,589 $245,979 Personal Protective 45,484 — 1,408 46,892 Keys and Key Accessories — 43,637 1,952 45,589 Engraving and Resharp — 11,8
Slide 8: Capital Structure
Capital Structure Leverage Continues to Improve March 30, 2024 Total Net Leverage ABL Revolver ($212 million capacity) $18.0 (Net Debt / TTM Adj. EBITDA) Term Note $749.7 Finance Leases and Other Obligations $10.5 Total Debt $778.2 Cash $30.7 Net Debt $747.5 TTM Adjusted EBITDA $231.5 Net Debt/ TTM
Slide 9: Outlook & Guidance
Outlook & Guidance 2024 Full Year Guidance On May 7, 2024, Hillman reiterated the following guidance (originally provided on February 22, 2024) based on its current view of the market and its performance expectations for the fifty-two week period ended December 28, 2024. (in millions USD) Full Year
Slide 10: 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 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 2023: By The Numbers • We are a leading North American provider of hardware products and solutions, including; ~20 billion ~245 million ~115+ million Fasteners Pairs of Work Keys ◦ Hardware and home improvement Sold Gloves Sold Duplicated products ◦ Protective and job si
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 April 1, 2023 March 30, 2024 Net loss $(9,132) $(1,492) Income tax benefit (7,856) (483) Interest expense, net 18,077 15,271 Depreciation 16,705 16,338 Amortization 15,572 15,254 EBITDA $33,366 $44,888 Stock compensation expense 2,637 2,829 Restruc
Slide 16: Adjusted Gross Margin Reconciliation
Adjusted Gross Margin Reconciliation Thirteen weeks ended April 1, 2023 March 30, 2024 Net Sales $349,707 $350,305 Cost of sales (exclusive of depreciation and amortization) 204,509 183,434 Gross margin exclusive of depreciation and amortization $145,198 $166,871 Gross margin exclusive of depreciati
Slide 17: Adjusted SG&A Expense Reconciliation
Adjusted SG&A Expense Reconciliation Thirteen weeks ended April 1, 2023 March 30, 2024 Selling, general and administrative expenses $111,065 $118,565 SG&A Adjusting Items (1): Stock compensation expense 2,637 2,829 Restructuring 1,408 991 Litigation expense 260 — Acquisition and integration expense
Slide 18: Net Debt & Free Cash Flow Reconciliations
Net Debt & Free Cash Flow Reconciliations Reconciliation of Net Debt As of December 30, 2023 March 30, 2024 Revolving loans $0 $18,000 Senior term loan 751,852 749,725 Finance leases and other obligations 9,097 10,453 Gross debt $760,949 $778,178 Less cash 38,553 30,672 Net debt $722,396 $747,506 Re
Slide 19: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Thirteen weeks ended April 1, 2023 HPS RDS Canada Consolidated Operating (loss) income $(3,836) $4,462 $463 $1,089 Depreciation & amortization 18,543 12,564 1,170 32,277 Stock compensation expense 2,205 282 150 2,637 Restructuring 1,257 151 — 1,408 Litigation