Hillman Solutions Corp. · NASDAQ:HLMN
Hillman Solutions — Q3 2024 Earnings Presentation
24 slides from Hillman Solutions's earnings presentation, Nov 5, 2024
Slide 1: Quarterly Earnings Presentation Q3 2024
Quarterly Earnings Presentation Q3 2024 November 5, 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: Q3 2024 Financial Review
Q3 2024 Financial Review Highlights for the 13 Weeks Ended September 28, 2024 • Net sales decreased (1.4)% to $393.3 million versus Q3 2023 ◦ Hardware and Protective Solutions ("HPS") increased 0.1% – Hardware Solutions decreased (1.6)% – Protective Solutions increased +5.9% ◦ Robotics and Digital S
Slide 4: Q3 2024 Operational Review
Q3 2024 Operational Review Highlights for the 13 Weeks Ended September 28, 2024 • Continued taking great care of customers: ◦ YTD fill rates averaged 95% • Acquired Intex DIY, a leading supplier of cleaning rags, cloths, and textiles • Subsequent to quarter end, Hillman won: ◦ 2024 Divisional Vendor
Slide 5: Q3 2024 YTD Financial Review
Q3 2024 YTD Financial Review Highlights for the 39 Weeks Ended September 28, 2024 • Net sales decreased (0.5)% to $1,123.0 million versus the thirty-nine weeks ended September 30, 2023 ◦ Hardware and Protective Solutions ("HPS") increased 1.9% – Hardware Solutions increased +1.8% – Protective Soluti
Slide 6: Quarterly Financial Performance
Quarterly Financial Performance Top & Bottom Line (vs Q3 2023) Net Sales Adjusted Gross Margin Adjusted EBITDA (millions $) (millions $ and % of Net Sales) (millions $ and % of Net Sales) $398.9 $393.3 $189.6 $176.3 $72.6 $66.8 48.2% 44.2% 18.4% 16.7% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024
Slide 7: Performance by Segment (Q3)
Performance by Segment (Q3) Hardware & Protective Q3 2024 Q3 2023 Δ Thirteen Weeks Ended 9/28/2024 9/30/2023 Comments Revenues $295,843 $295,553 0.1% Driven by Koch and Intex acquisitions and new business Adjusted EBITDA $48,710 $40,659 19.8% Margin expansion from price/cost dynamic Margin (Adj. EBI
Slide 8: Performance by Segment (Q3 YTD)
Performance by Segment (Q3 YTD) Hardware & Protective Q3 2024 Q3 2023 Δ Thirty-nine weeks ended 9/28/2024 9/30/2023 Comments Revenues $833,847 $818,198 1.9% Driven by Koch and Intex acquisitions and new business Adjusted EBITDA $124,611 $87,385 42.6% Margin expansion from price/cost dynamic Margin (
Slide 9: Revenue by Product Category (Q3)
Revenue by Product Category (Q3) Hardware & Robotics & Canada Total Revenue Protective Digital Thirteen Weeks Ended September 28, 2024 Fastening and Hardware $224,850 $— $33,918 $258,768 Personal Protective 70,993 — 724 71,717 Keys and Key Accessories — 48,593 2,674 51,267 Engraving and Resharp — 11
Slide 10: Revenue by Product Category (Q3 YTD)
Revenue by Product Category (Q3 YTD) Hardware & Robotics & Canada Total Revenue Protective Digital Thirty-nine weeks ended September 28, 2024 Fastening and Hardware $670,369 $— $106,109 $776,478 Personal Protective 163,478 — 3,327 166,805 Keys and Key Accessories — 137,395 6,634 144,029 Engraving an
Slide 11: Capital Structure
Capital Structure Leverage Continues to Improve September 28, 2024 Total Net Leverage ABL Revolver ($264.8 million capacity) $— (Net Debt / TTM Adj. EBITDA) 5.0x Term Note $747.6 Finance Leases and Other Obligations $11.0 4.0x 3.7x Total Debt $758.6 3.3x 3.2x Cash $59.8 3.0x 2.9x 2.8x Net Debt $698.
Slide 12: 2024 Outlook & Guidance
2024 Outlook & Guidance 2024 Full Year Guidance - Update On November 5, 2024, Hillman updated its guidance most recently provided on August 6, 2024 with Hillman's second quarter 2024 results. Full Year 2024 Guidance FY 2024 Guidance (in millions USD) Previous FY 2024 Guidance Range - Updated Midpoin
Slide 13: Key Takeaways
Key Takeaways 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 spending as
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 September 28, 2024 September 30, 2023 Net income $7,434 $5,057 Income tax expense (benefit) 4,372 12,957 Interest expense, net 15,108 16,728 Depreciation 17,948 14,434 Amortization 15,354 15,583 EBITDA $60,216 $64,759 Stock compensation expense 3,2
Slide 19: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Thirty-nine weeks ended September 28, 2024 September 30, 2023 Net income (loss) $18,477 $470 Income tax benefit 9,003 3,278 Interest expense, net 44,316 52,880 Depreciation 50,583 44,939 Amortization 45,857 46,733 EBITDA $168,236 $148,300 Stock compensation expense 9,7
Slide 20: Adjusted Gross Margin Reconciliation
Adjusted Gross Margin Reconciliation Thirteen weeks ended September 28, 2024 September 30, 2023 Net Sales $393,296 $398,943 Cost of sales (exclusive of depreciation and amortization) 203,700 222,644 Gross margin exclusive of depreciation and amortization $189,596 $176,299 Gross margin exclusive of d
Slide 21: Adjusted SG&A Expense Reconciliation
Adjusted SG&A Expense Reconciliation Thirteen weeks ended September 28, 2024 September 30, 2023 Selling, general and administrative expenses $130,261 $113,359 (1) SG&A Adjusting Items : Stock compensation expense 3,257 3,069 Restructuring 1,322 179 Litigation expense — 79 Acquisition and integration
Slide 22: Net Debt & Free Cash Flow Reconciliations
Net Debt & Free Cash Flow Reconciliations Reconciliation of Net Debt As of September 28, 2024 December 30, 2023 Revolving loans $0 $0 Senior term loan 747,597 751,852 Finance leases and other obligations 10,956 9,097 Gross debt $758,553 $760,949 Less cash 59,820 38,553 Net debt $698,733 $722,396 Rec
Slide 23: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Thirteen weeks ended September 28, 2024 HPS RDS Canada Consolidated Operating income $17,210 $7,342 $2,362 $26,914 Depreciation & amortization 20,673 11,472 1,157 33,302 Stock compensation expense 2,850 333 74 3,257 Restructuring and other 19 390 913 1,322 Tra
Slide 24: Segment Adjusted EBITDA Reconciliations
Segment Adjusted EBITDA Reconciliations Thirty-nine weeks ended September 28, 2024 HPS RDS Canada Consolidated Operating income $46,501 $20,409 $7,894 $74,804 Depreciation & amortization 60,786 31,914 3,740 96,440 Stock compensation expense 8,239 946 557 9,742 Restructuring and other 631 747 1,814 3