Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — The Hillman Companies — SPAC Merger (January 2021)
39 slides from Hillman Solutions's SPAC merger presentation, Jan 25, 2021
Slide 1: Investor Presentation January 2021
Investor Presentation January 2021
Slide 2: Disclaimer
This presentation (the “presentation”) is being delivered to a limited number of parties for informational purposes only and doe s not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, debtor othe r f inancial instruments of Landcadia Holding
Slide 3: Transaction Summary
Transaction Summary 2 Doug Cahill Chairman, Chief Executive Officer and President Tilman J. Fertitta Co - Chairman and Chief Executive Officer Rocky Kraft Chief Financial Officer Richard Handler Co - Chairman and President Richard Liem Vice President and Chief Financial Officer ▪ Hillman is the lead
Slide 4: What We Like About Hillman
What We Like About Hillman 3 Foundation in place to achieve 6% Sales and 10% Adjusted EBITDA growth before acquisitions 1 Market Leader in Complex, Compelling Categories for Best - in - Class Retailers 2 55 Years of Sales Growth in the Last 56 (1) 3 Differentiated Platform Drives Share Gains and Wid
Slide 5: Indicative Transaction Overview and Pro Forma Ownership
Illustrative Pro Forma Ownership (4) Indicative Transaction Overview Existing Hillman Investors 49% Public Shareholders 26% PIPE Investors 20% Landcadia III Founders 5% ~$1.9 billion PF Equity Value __________________________ Note: The sources and uses of funds presented herein are forward - looking
Slide 6: Top-Tier Financial Profile Relative to Peers
11.0x 12.9x 13.9x 15.5x 20.2x 20.4x 28.1x 30.2x Hillman Pro Forma Ferguson Grainger HD Supply Fastenal Watsco Pool Corp. SiteOne Median: 12.6% Top - Tier Financial Profile Relative to Peers 2017A – 2020E Revenue CAGR Median: 5.0% 5 2017A – 2020E Adjusted EBITDA CAGR 2020E Adjusted Gross Margin 2020E
Slide 7: The Hillman Group
The Hillman Group HILLMAN
Slide 8: Investment Highlights
Significant runway for incremental growth: organic and via M&A Management team with proven operational and M&A expertise Strong financial profile with 56 - year track record Market and innovation leader across compelling categories Indispensable partner embedded with winning retailers Customers love
Slide 9: Hillman at a Glance
Hillman at a Glance 8 Founded in 1964; HQ in Cincinnati, OH The leading distributor of hardware and home improvement products, personal protective equipment and robotic kiosk technologies to a broad range of winning retailers in the U.S., Canada and Mexico The predominance of our sales come from Hil
Slide 10: Revenue and Adjusted EBITDA Snapshot
Revenue and Adjusted EBITDA Snapshot 9 2020E, % of Total ($ in millions) __________________________ Note: Figures may not tie due to rounding and corporate eliminations. Note: 2020E defined as preliminary year - end results. Adjusted EBITDA is a non - GAAP measure. Please see page 33 for a reconcili
Slide 11: Segment Position
10 Segment Position #1 #1 #1 Hardware Solutions Protective Solutions Robotics and Digital Solutions Our Primary Business Segments Key and Fob Duplication Personalized Tags Knife Sharpening Fasteners &Specialty Gloves Builders Hardware & Metal Shapes Safety / PPE Construction Fasteners Work Gear Pict
Slide 12: Hardware Solutions Overview
Hardware Solutions Overview 11 Broad and diversified product portfolio with ~61,000 SKUs ▪ Market leader across the fastening and hardware industry ▪ Customer - first culture serving end user needs ▪ Long - standing relationships with all key customers ▪ Highly sticky and deeply moated through a win
Slide 13: Protective Solutions Overview
Protective Solutions Overview 12 Leader in PPE consistently delivering disruptive innovation ▪ Industry leading brands ▪ Leading supplier of personal protection equipment ▪ Design driven culture focused on product development with speed to market ▪ Serving all pro and DIYer’s needs ▪ Experienced sou
Slide 14: Robotics & Digital Solutions Overview
▪ Unique provider of robotic consumer solutions : ▪ Key duplication (full - service and self - service) ▪ Fob duplication ▪ Pet tags ▪ Knife sharpening ▪ Cutting - edge products and proprietary technology platform ▪ Expanding innovation roadmap ▪ Highly attractive margin profile and a two year or le
Slide 15: Indispensable Partner Embedded with Winning Retailers
Indispensable Partner Embedded with Winning Retailers Trusted partner that provides mission - critical sourcing and in - store and online inventory, category management and in - store services 14 Our products and brands are critical to our customers: consumable, foot traffic driving, basket building
Slide 16: Customers Love Us, Trust Us and Rely on Us
Customers Love Us, Trust Us and Rely on Us 15 “This is an unprecedented time as we all navigate the ongoing global economic, social and health impacts of COVID - 19… [ We would ] like to take a moment to mention just a few of the suppliers who made an extraordinary effort to keep our stores well sto
Slide 17: Steady, Long-Term, Predictable Growth
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E Hillman Sales $1.4bn Steady, Long - Term, Predictable Growth ~$ 200 mm Track Record of Growth 10 % Total Sales CAGR 16 6 % Organic Sales CAGR During the Great Recession (’08 - ’09), Sales declin
Slide 18: Multiple Levers to Drive Growth
Multiple Levers to Drive Growth
Slide 19: Multiple Levers to Drive Growth
▪ Hillman’s markets expected to grow at 4% CAGR from 2020 - 2024 ▪ Increasing home improvement spending ▪ Acquire forward - looking innovative companies ▪ Leverage Hillman’s relationships with leading retailers and powerful in - store model to help scale acquired companies ▪ Capitalize on innovation
Slide 20: Attractive Market Dynamics Support Strong Future Growth
Attractive Market Dynamics Support Strong Future Growth Existing Products and Channels Adjacent Categories Product and Channel Expansion ($ in billions) ($ in billions) ($ in billions) __________________________ Source: Third party industry reports. 19 Favorable secular trends and underlying Repair
Slide 21: Hardware Solutions Innovation: Driving Into the Future
Hardware Solutions Innovation: Driving Into the Future 20 Highly Successful Launch… …Poised for Continued Future Growth Significant Growth Since Launch with Sustained Momentum and Upside Opportunity ▪ Hillman developed premium PowerPro line in 2001 ▪ Established brand with premium position to serve
Slide 22: Case Study: User-Driven Innovation
Case Study: User - Driven Innovation… 21 Through extensive in - field research, Protective Solutions develops patent protected products that resonate with the core consumer Floating TPR Protection Geometric Hi - Density Foam Athletic Wrist Athletic Wrist Ergonomic Palm Design Extended Thumb Saddle D
Slide 23: Case Study: New Product Development
Case Study: New Product Development 22 __________________________ Source: Management estimates and analysis. Note: ReSharp was acquired in 2019 and is reported under the Robotics and Digital Solutions segment. Note: Adjusted EBITDA is a non - GAAP measure. Please see page 35 for a reconciliation of
Slide 24: M&A is, and Will Be, a Key Tool For Our Expansion
23 M&A is, and Will Be, a Key Tool For Our Expansion 2020 2019 2018 2017 $550mm+ spent on strategic acquisitions since 2017 x New product categories x Innovative technology x Leverage our retail relationships Hillman has a proven M&A platform with a strong track record of identifying, executing and
Slide 25: Case Studies: M&A and Integration
and Case Studies: M&A and Integration 24 Strategic Rationale: Purchase Price: Enter gloves / PPE category $36 $67 16% 21% Oct-18 2020E Adj. EBITDA Adj. EBITDA Margin $345M (2018) CAGR: 28% Growth and Margin Enhancement: History of building out the business through strategic tuck - ins and transforma
Slide 26: Management Team with Proven Operational and M&A Expertise
Management Team with Proven Operational and M&A Expertise 25 Management team brings a results - driven approach to innovation and growth ▪ Appointed to current position in September 2019; Chairman since 2015 ▪ Over 25 years of experience growing consumer - focused and industrial companies ▪ Previous
Slide 27: Financial Overview
Financial Overview Sa HILLMAN’
Slide 28: Strong Financial Profile with Proven Track Record
Strong Financial Profile with 56 - year Track Record 27 ($ in millions) Proven Track Record of Delivering Results (1) Exceptional Growth & Stability Superior Performance Strong Cash Flow Generation Attractive Growth Prospects Adj. EBITDA Margin Improvement ▪ 17.7% sales CAGR and 22.2% Adj. EBITDA CA
Slide 29: Recent Developments – Strong Finish to 2020
Recent Developments – Strong Finish to 2020 28 __________________________ Note: 2020E defined as preliminary year - end results. Note: FY 2020 EBITDA of $221.2M includes $28.4M of adjustments detailed beginning on page 33. Full Year Q4 12% $1,222 $1,368 2019A 2020E Sales $179 $221 14.6% 16.2% 2019A
Slide 30: Infrastructure in Place to Drive Future Growth
Infrastructure in Place to Drive Future Growth 29 Capability - Enhancing, High - Return Growth CapEx Examples Robotic Kiosk Technologies ~$120M Strategic technology investments enhanced product quality and consumer convenience Cutting - Edge ERP Technology ~$20M Improved agility and efficiency of Hi
Slide 31: Strong Capital Structure and Free Cash Flow Support Growth
Strong Capital Structure and Free Cash Flow Support Growth 30 Total Net Leverage Based on 2020E Adj. EBITDA 6.9x 3.3x Current Pro Forma Total Leverage Based on 2020E Adj. EBITDA ($ millions) Current (1) Pro Forma (2) Cash $ 22 $ 96 ABL Revolver ($250.0 million) $ 72 First Lien Term Loan 1,037 Capita
Slide 32: A Clear Roadmap for Future Growth
A Clear Roadmap for Future Growth ($ in millions) Adj. EBITDA Growth ($ in millions) Sales Growth $1,368 Market growth 2020E 2025P (Total) 2025P (Organic) Rollout of new robotics and digital programs Continued strategic M&A Sales growth flow through at 2020E margin 2020E 2025P (Total) 2025P (Organic
Slide 33: Hillman Is In a League of Its Own
When It Comes To Distributing Fasteners, Hardware, Keys, Tags & PPE to Winning Retailers, Hillman Is In a League of Its Own 32 x At end of 2020: 3 - year compound annual growth of 18% top line and 22% Adj. EBITDA x Strength proven during COVID: FY 2020E sales up 12% and Adj. EBITDA up 24% x Leadersh
Slide 34: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 33 Historical & Preliminary 2019 2020 ($ millions) 2017A 2018A Q1A Q2A Q3A Q4A 2019A Q1A Q2A Q3A Q4E 2020E Net Income $58.6 ($69.6) ($35.3) ($19.5) ($14.5) ($34.1) ($103.4) ($9.8) ($4.2) $10.7 ($14.0) ($17.4) Interest 63.2 82.8 29.6 29.1 27.9 27.2 113.8 26.2 27.0 23.8
Slide 35: Adjusted EBITDA Reconciliation: Hardware and Protective Solutions
Adjusted EBITDA Reconciliation: Hardware and Protective Solutions 34 Historical & Preliminary 2019 2020 ($ millions) 2017A 2018A Q1A Q2A Q3A Q4A 2019A Q1A Q2A Q3A Q4E 2020E Reported Income from Operations $7.8 $18.6 ($2.6) $10.9 $8.0 ($2.2) $14.2 $8.9 $24.4 $30.1 $3.9 $67.3 Depreciation & Amortizati
Slide 36: Adjusted EBITDA Reconciliation: Robotics & Digital Solutions
Adjusted EBITDA Reconciliation: Robotics & Digital Solutions 35 Historical & Preliminary 2019 2020 ($ millions) 2017A 2018A Q1A Q2A Q3A Q4A 2019A Q1A Q2A Q3A Q4E 2020E Reported Income from Operations $24.8 $17.7 $3.0 ($3.4) $4.2 ($0.5) $3.4 $5.9 ($4.5) $3.0 ($1.3) $3.2 Depreciation & Amortization 25
Slide 37: Adjusted EBITDA Reconciliation: Canada
Adjusted EBITDA Reconciliation: Canada 36 __________________________ Note: 2020E defined as preliminary year - end results. 1. Includes the restructuring of Canadian operations and executive severance. Historical & Preliminary 2019 2020 ($ millions) 2017A 2018A Q1A Q2A Q3A Q4A 2019A Q1A Q2A Q3A Q4E
Slide 38: Adjusted Net Sales Reconciliation by Segment
Adjusted Net Sales Reconciliation by Segment 37 Historical & Preliminary 2019A 2020E ($ millions) Q1A Q2A Q3A Q4A 2019A Q1A Q2A Q3A Q4E 2020E Hardware & Protective Solutions Net Sales (Reported) $201.6 $226.4 $222.9 $202.1 $853.0 $213.2 $269.5 $300.3 $241.4 $1,024.4 Buy - back Expense 4.1 2.0 - 1.1
Slide 39: Adjusted Gross Margin Reconciliation
Adjusted Gross Margin Reconciliation 38 Historical & Preliminary Forecast ($ millions) 2017A 2018A 2019A 2020E 2021P 2022P Net Sales (Reported) $838.4 $974.2 $1,214.4 $1,368.3 $1,443.6 $1,503.5 Buy - back Expense - - 7.2 - - - Net Sales (Adjusted) $838.4 $974.2 $1,221.6 $1,368.3 $1,443.6 $1,503.5 Co