Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — Q2 2022 Earnings Presentation
24 slides from Hillman Solutions's earnings presentation, Aug 3, 2022
Slide 1: Quarterly Earnings Presentation Q2 2022
235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Quarterly Earnings Presentation Q2 2022
Slide 2: Forward-Looking Statements
2 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 PresBuilder Placeholder - Delete this box if you see it on a slide, but DO NOT REMOVE this box from the slide layout This presentation contains certain forward-looking statements, including, b
Slide 3: Q2 2022 Financial Highlights for the 13 Weeks Ended
3 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 • Net sales increased 4.9% to $394.1 million versus Q2 2021 ◦ Hardware Solutions +12.0% ◦ Robotics and Digital Solutions ("RDS") (2.4)% ◦ Canada +7.1% ◦ Protective Solutions (12.0)% • GAAP net
Slide 4: Q2 2022 Operational Highlights
4 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Q2 2022 Highlights • Successfully finalized details of price increase (fourth increase in past 15 months) • Maintained average fill rates of nearly 97% during the quarter • Completed fastener
Slide 5: YTD 2022 Financial Highlights for the 26 Weeks Ended
5 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 • Net sales increased 5.6% to $757.1 million versus the 26 weeks ended June 26, 2021 ◦ Hardware Solutions +12.7% ◦ Robotics and Digital Solutions ("RDS") +3.6% ◦ Canada +4.4% ◦ Protective Solu
Slide 6: Quarterly Financial Performance
6 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Adjusted EBITDA (millions $ and % of Net Sales) Top & Bottom Line Performance Net Sales (millions $) Adjusted Gross Margin (millions $ and % of Net Sales) Please see reconciliation of Adjusted
Slide 7: Q2 2022 Segment Results (13 Weeks)
7 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Hardware & Protective Q2 2021 Q2 2022 Δ Thirteen weeks ended 6/26/2021 6/25/2022 Comments Revenues $263,129 $279,842 6.4% Price increases + lighter volume (HS & PS) Adjusted EBITDA $36,114 $31
Slide 8: Q2 2022 Segment Results (26 Weeks)
8 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Hardware & Protective YTD 2021 YTD 2022 Δ Twenty-six weeks ended 6/26/2021 6/25/2022 Comments Revenues $514,058 $546,257 6.3% Price increases + flat demand (HS) and lower PPE sales (PS) Adjust
Slide 9: Revenue by Business Segment (Q2)
9 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Hardware & Protective Robotics & Digital Canada Revenue Thirteen weeks ended June 25, 2022 Fastening and Hardware $225,377 $— $48,473 $273,850 Personal protective 54,465 — 220 54,685 Keys and
Slide 10: Revenue by Business Segment (YTD)
10 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Hardware & Protective Robotics & Digital Canada Revenue Twenty-six weeks ended June 25, 2022 Fastening and Hardware $414,684 $— $82,132 $496,816 Personal protective 131,573 — 662 132,235 Keys
Slide 11: Capital Structure Supports Growth & Enables Healthy Fill Rates
11 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Capital Structure Supports Growth & Enables Healthy Fill Rates Total Net Leverage Net Debt / TTM Adj. EBITDA Please see reconciliation of Adjusted EBITDA to Net Income and Net Debt in the App
Slide 12: 2022 Outlook & Guidance
12 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 (in millions USD) 2H 2022 v. 2H 2021 Update (%) Full Year 2022 Guidance Range Update Revenues + Mid Single Digits $1,500- $1,600 Toward the low end of guidance range Adjusted EBITDA + High Si
Slide 13: Key Takeaways
13 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Key Takeaways Price Increases Offset Headwinds; Positioned Well for 2H 2022 Long-term Annual Growth Targets (Organic): Revenue Growth: +6% & Adj. EBITDA Growth: +10% Long-term Annual Growth T
Slide 14: Appendix
14 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Appendix
Slide 15: Investment Highlights
15 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Significant runway for incremental growth: Organic + M&A Management team with proven operational and M&A expertise Strong financial profile with 57-year track record Market and innovation lea
Slide 16: Who We Are
16 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Who We Are Notes: Figures may not tie due to rounding and corporate eliminations. Adjusted EBITDA is a non-GAAP measure. Please see page 17 for a reconciliation of Adjusted EBITDA to Net Inco
Slide 17: #1 in Segment, Representative Top Customers
17 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 #1 in Segment Representative Top Customers #1 in Segment #1 in Segment Key and Fob Duplication Personalized Tags Knife Sharpening Fasteners & Specialty Gloves Builders Hardware & Metal Shapes
Slide 18: Adjusted EBITDA Reconciliation (13 Weeks)
18 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Thirteen weeks ended June 26, 2021 June 25, 2022 Net loss $(3,385) $8,816 Income tax benefit 1,428 6,424 Interest expense, net 19,159 12,533 Interest expense on junior subordinated debentures
Slide 19: Adjusted EBITDA Reconciliation (26 Weeks)
19 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Twenty-six weeks ended June 26, 2021 June 25, 2022 Net loss $(12,355) $6,929 Income tax benefit (5,225) 5,532 Interest expense, net 38,178 24,161 Interest expense on junior subordinated deben
Slide 20: Adjusted Gross Profit Margin Reconciliation
20 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Thirteen weeks ended June 26, 2021 June 25, 2022 Net Sales $375,715 $394,114 Cost of sales (exclusive of depreciation and amortization) 215,967 220,146 Gross margin exclusive of depreciation
Slide 21: Adjusted SG&A Expense Reconciliation
21 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Thirteen weeks ended June 26, 2021 June 25, 2022 Selling, general and administrative expenses $111,662 $118,229 Adjusting Items (1): Stock compensation expense 1,796 2,286 Restructuring — 513
Slide 22: Net Debt & Free Cash Flow Reconciliations
22 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 For Period Ending June 26, 2021 December 25, 2021 June 25, 2022 Revolving loans $158,000 $93,000 $117,000 Senior term loan 1,066,740 851,000 846,745 6.375% Senior Notes, due 2022 330,000 — —
Slide 23: Segment Adjusted EBITDA Reconciliation (13 Weeks)
23 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Thirteen Weeks Ended June 25, 2022 HPS RDS Canada Consolidated Operating Income (Loss) $10,538 $10,437 $6,798 $27,773 Depreciation & Amortization 17,662 10,916 1,160 29,738 Stock compensation
Slide 24: Segment Adjusted EBITDA Reconciliation (26 Weeks)
24 235 235 235 56 115 144 36 90 87 61 61 61 180 180 180 147 183 201 30 140 130 Earnings Presentation Q2 2022 Twenty-six weeks ended June 25, 2022 HPS RDS Canada Consolidated Operating Income (Loss) $8,142 $18,292 $10,188 $36,622 Depreciation & Amortization 34,719 21,470 2,324 58,513 Stock Compensati