Group 1 - Hillman Solutions Corp. (HLMN) closed at $8, with a 5.3% gain over the past four weeks, and has a mean price target of $10.94, indicating a 36.8% upside potential [1] - The mean estimate consists of eight short-term price targets with a standard deviation of $2.54, where the lowest estimate is $8.00 and the highest is $15.00, suggesting an 87.5% potential increase [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements, as indicated by a 0.6% increase in the Zacks Consensus Estimate for the current year [11][12] Group 2 - HLMN has a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential upside [13] - The clustering of price targets with a low standard deviation suggests a high degree of agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9] - While price targets should not be the sole basis for investment decisions, the direction they imply appears to be a good guide for potential price movements [14]

Core Insights - Hillman Solutions Corp. published its annual Corporate Responsibility fact sheet, highlighting its ESG initiatives for the year ending December 31, 2024 [1] - The company emphasizes its commitment to long-term sustainability, corporate governance, and social impact as integral to its business operations [2] Company Overview - Hillman Solutions Corp. is a leading provider of hardware products and solutions for home improvement, hardware, and farm and fleet retailers across North America, with over 60 years of industry experience [4] - The company offers a diverse portfolio including hardware solutions, protective solutions, and robotic and digital solutions, supported by a robust distribution network [4] Corporate Responsibility Initiatives - The Corporate Responsibility fact sheet outlines Hillman's efforts to reduce its environmental footprint, invest in employee development, and engage with communities [3] - Key achievements in 2024 include Vendor of the Year recognition from two customers, Partner of the Year in Canada, and the Pro Tool Innovation Award [6] Governance and Workplace Culture - The report details Hillman's corporate governance practices, including board composition and strategic leadership changes [6] - Statistics related to workplace safety, health, and inclusivity are highlighted, showcasing the company's commitment to a value-driven workplace [6] Environmental Impact - Hillman is focused on maintaining an innovative, inclusive, and environmentally conscious approach in its daily operations, with an expanded assessment of Scope 1-3 greenhouse gas emissions [3][6]

Core Viewpoint - Hillman Solutions Corp. is set to announce its financial results for the thirteen and twenty-six weeks ended June 28, 2025, during a conference call on August 5, 2025, at 8:30 a.m. Eastern Time [1][4]. Company Overview - Hillman Solutions Corp. is a prominent provider of hardware-related products and solutions, serving home improvement, hardware, and farm and fleet retailers across North America [5]. - The company is recognized for its strong customer service and has built a competitive advantage through direct-to-store shipping and a dedicated in-store sales and service team of over 1,200 professionals [5]. - Hillman's product portfolio includes hardware solutions (fasteners, screws, nuts, and bolts), protective solutions (work gloves, jobsite storage, and protective gear), and robotic and digital solutions (key duplication and tag engraving) [5]. - The company has over 60 years of experience in the industry and is frequently awarded vendor of the year by top customers due to its world-class distribution network [5]. Earnings Call Details - The earnings release will be issued on the same day as the conference call, prior to the results presentation [1][4]. - The call will be hosted by President and CEO Jon Michael Adinolfi and CFO Rocky Kraft [2]. - A listen-only webcast will be available, and sell-side analysts must register to participate in the live Q&A session [3].

Industry Overview - The Zacks Building Products - Miscellaneous industry is experiencing growth due to increased government infrastructure spending, which is driving demand for construction-related products and services [1] - Key players in the industry, such as United Rentals, Inc., Masco Corporation, Construction Partners, Inc., Hillman Solutions Corp., and Quanex Building Products Corporation, are well-positioned to capitalize on these trends [1] Current Challenges - The industry faces near-term challenges from high mortgage rates, affordability concerns, and inflation-related cost pressures, including tariffs on raw materials like iron, steel, and copper [2] - Despite these challenges, proactive cost management and pricing strategies are helping to mitigate headwinds [2] Industry Description - The industry comprises manufacturers, designers, and distributors of home improvement and building products, including ceiling systems, doors, windows, flooring, and metal products [3] - Companies also provide solutions for rehabilitating aging infrastructure and rent equipment to a diverse customer base [3] Future Trends - Strong global trends in infrastructure modernization and energy transition are expected to benefit industry players [4] - Improving residential construction markets are anticipated to drive growth, with builders cautiously optimistic for 2025 due to a lack of existing inventory [4] Operational Strategies - Industry participants are implementing cost-saving initiatives, including business consolidation and supply chain improvements, to boost profitability [5] - Strategic investments in new products and acquisitions are being pursued to supplement organic growth [5] Tariff Impact - U.S. tariff policies are increasing costs and disrupting supply chains, leading to heightened inflation [6] - Overall construction input prices were reported to be 1.1% higher in June compared to the previous year [6] Market Performance - The Zacks Building Products - Miscellaneous industry has underperformed the S&P 500 Composite and the broader Zacks Construction sector over the past year, losing 8.4% [12] - The industry is currently trading at a forward P/E ratio of 16.7X, lower than the S&P 500's 22.61X and the sector's 18.76X [15] Company Highlights - **Construction Partners**: Positioned for strong growth with a record project backlog of $2.84 billion and significant revenue growth from acquisitions [20][21] - **Quanex**: Benefiting from the acquisition of Tyman, contributing to a 67.3% year-over-year increase in consolidated sales [24][25] - **United Rentals**: Growth driven by strong demand in infrastructure projects and a stable customer sentiment, with a reaffirmed full-year guidance [27][28][29] - **Masco**: Facing a potential $400 million tariff headwind but expects to offset 50%-65% through pricing and cost reduction efforts [31][32] - **Hillman**: Aiming to reduce reliance on Chinese suppliers and maintain sales growth despite macroeconomic challenges [35][36]

Core Viewpoint - Hillman Solutions Corp. (HLMN) has seen a 13.1% increase in share price over the past four weeks, closing at $7.77, with a potential upside of 40.8% based on Wall Street analysts' mean price target of $10.94 [1] Price Targets and Analyst Estimates - The mean estimate consists of eight short-term price targets with a standard deviation of $2.54, indicating variability among analysts [2] - The lowest estimate is $8.00, suggesting a 3% increase, while the highest estimate is $15.00, indicating a potential surge of 93.1% [2] - A low standard deviation signifies greater agreement among analysts regarding price movement [2][9] Analyst Optimism and Earnings Estimates - Analysts show strong agreement in revising HLMN's earnings estimates upward, which is a positive indicator for potential stock upside [4][11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 0.6%, with one estimate moving higher and no negative revisions [12] Zacks Rank and Investment Potential - HLMN holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors [13] - The combination of a positive earnings outlook and a strong Zacks Rank suggests a more conclusive indication of the stock's potential upside [13] Conclusion on Price Targets - While the consensus price target may not be a reliable measure of HLMN's potential gains, the direction indicated by these targets appears to be a useful guide for further research [14]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 totaled $359.3 million, an increase of 2.6% compared to Q1 2024, driven by the Intex acquisition and new business [16][21] - Adjusted EBITDA increased by 4.2% to $54.5 million, with adjusted EBITDA margins improving by 30 basis points to 15.2% [17][22] - Adjusted gross margins decreased to 46.9%, down from 47.6% in the prior year [17][22] Business Line Data and Key Metrics Changes - Hardware and Protective Solutions (HPS) segment net sales increased by 5.6%, with adjusted EBITDA rising by 15.8% to $37.4 million [18] - Robotics and Digital Solutions (RDS) net sales were up 1.9%, with adjusted gross margins and adjusted EBITDA margins slightly down [19] - Canadian business net sales decreased by 18.7% due to a 12% decline in existing home sales and economic uncertainty [20] Market Data and Key Metrics Changes - Approximately one-third of products are sourced from China, with plans to reduce this to about 20% by year-end 2025 [7][14] - The company anticipates a 17% decline in market volumes during the second half of 2025, which is considered a conservative estimate [10][46] Company Strategy and Development Direction - The company is implementing a dual faucet strategy to diversify its supply chain and reduce reliance on Chinese suppliers [14] - Focus on maintaining strong partnerships with customers and suppliers to navigate tariff impacts and optimize sourcing [11][32] - The company aims to manage through current challenges and believes it will emerge stronger [15][31] Management's Comments on Operating Environment and Future Outlook - Management reiterated full-year 2025 net sales and adjusted EBITDA guidance, citing ongoing monitoring of tariffs and economic conditions [6][25] - The company is confident in its ability to manage through tariff-related challenges and maintain service levels [62] - Future growth opportunities are anticipated as the home improvement market rebounds [65] Other Important Information - The estimated annualized impact of new tariffs is approximately $250 million, which the company plans to offset through price increases [7][26] - Free cash flow guidance has been withdrawn due to uncertainties surrounding tariffs [28] Q&A Session Summary Question: Impact of tariffs on RDS margins - Management acknowledged pressure on RDS margins due to the rollout and expects margins to improve to 30% EBITDA rate and 70% gross margins for the rest of the year [38] Question: Performance of Personal Protective business - No material pull forwards were noted, and promotional activity was strong, leading to better-than-expected performance [39] Question: Volume assumptions for the second half of the year - Initial guidance assumed a 1% decline in market volumes, but the current estimate is a conservative 17% decline [46] Question: Future sourcing strategy - The company is targeting a reduction in Chinese sourcing to 20% and is exploring opportunities in Southeast Asia and India [49] Question: Timing of price increases - Price increases are expected to be implemented by July 1, with a dollar-for-dollar approach to tariffs [54][56] Question: Comparison to COVID supply chain issues - Current supply chain performance is better than during COVID, with no significant disruptions reported [62] Question: M&A activity in the current environment - The M&A pipeline remains strong, but uncertainty around tariffs is impacting valuations [88]

Financial Performance - Net sales increased by 2.6% to $359.3 million compared to Q1 2024[8] - Adjusted EBITDA increased to $54.5 million, a 4.2% increase from $52.3 million in Q1 2024[8, 13] - Adjusted EBITDA margins were 15.2%, up from 14.9% in Q1 2024[8] - GAAP net loss totaled $(0.3) million, an improvement from $(1.5) million in Q1 2024[8] Segment Performance - Hardware and Protective Solutions (HPS) revenues increased by 5.6% to $274.4 million[8, 13] - Robotics and Digital Solutions (RDS) revenues increased by 1.9% to $56.5 million[8, 13] - Canada revenues decreased by 18.7% to $28.4 million[8, 13] Supply Chain and Strategy - The company has diversified its supply chain, reducing China exposure from 49% in 2018 to 33% in 2025[17] - The company aims to further reduce China-based supplier exposure to approximately 20% by the end of 2025[9, 18] Capital Structure and Guidance - Net Debt / Adjusted EBITDA (ttm) was 2.9x at quarter end[8, 20] - The company reiterated FY 2025 Net Sales and Adjusted EBITDA guidance[9, 24]

Company Performance - Hillman Solutions Corp. reported quarterly earnings of $0.10 per share, matching the Zacks Consensus Estimate and remaining unchanged from the previous year [1] - The company posted revenues of $359.34 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 0.22% and up from $350.31 million a year ago [2] - Over the last four quarters, Hillman has surpassed consensus revenue estimates two times [2] Stock Performance - Hillman Solutions Corp. shares have declined approximately 22.3% since the beginning of the year, compared to a 6% decline in the S&P 500 [3] - The current Zacks Rank for Hillman is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $394.6 million, and for the current fiscal year, it is $0.58 on revenues of $1.53 billion [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock performance [6] Industry Context - The Building Products - Miscellaneous industry, to which Hillman belongs, is currently ranked in the bottom 36% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Data and Key Metrics Changes - Net sales in Q1 2025 totaled $359.3 million, an increase of 2.6% compared to Q1 2024, driven by the Intex acquisition and new business [16][17] - Adjusted EBITDA increased by 4.2% to $54.5 million, with adjusted EBITDA margins improving by 30 basis points to 15.2% [17][22] - Adjusted gross margins for the quarter were 46.9%, down from 47.6% in the prior year [17][22] Business Line Data and Key Metrics Changes - Net sales in the Hardware and Protective Solutions (HPS) segment increased by 5.6%, with adjusted EBITDA rising by 15.8% to $37.4 million [18] - Robotics and Digital Solutions (RDS) net sales were up 1.9%, with adjusted gross margins and adjusted EBITDA margins slightly down [19] - Canadian business net sales decreased by 18.7% due to a 12% decline in existing home sales and economic uncertainty [20] Market Data and Key Metrics Changes - The company expects market volumes to decline approximately 17% in the second half of 2025, which is a conservative estimate compared to historical performance [10][48] - The Canadian market is anticipated to return to profitable growth with the best retail partners and highest market share in hardware [20] Company Strategy and Development Direction - The company is implementing a dual faucet strategy to reduce reliance on Chinese suppliers from nearly 50% to approximately 20% by year-end 2025 [14] - The focus remains on optimizing the supply chain and maintaining strong partnerships with customers and suppliers [11][14] - The company is confident in navigating the current tariff environment and believes it will emerge stronger [15][32] Management's Comments on Operating Environment and Future Outlook - Management reiterated full-year 2025 net sales and adjusted EBITDA guidance, citing various external factors impacting the business [6][25] - The company is prepared for potential challenges and is optimistic about long-term demand in the home improvement market [67] Other Important Information - The estimated impact of new tariffs for 2025 is approximately $250 million on an annualized basis [8][27] - The company ended Q1 2025 with $703.7 million in total net debt and liquidity of $200.9 million [24] Q&A Session Summary Question: Impact of tariffs on RDS margins - Management acknowledged pressure on RDS margins due to the rollout and expects margins to improve to 30% EBITDA rate and 70% gross margins for the rest of the year [39] Question: Performance of Personal Protective segment - Management confirmed no material pull forwards in the Personal Protective segment and expressed satisfaction with its performance [40][41] Question: Volume assumptions for the second half of the year - Management stated that the current guidance assumes a conservative 17% decline in market volumes, which is unprecedented [48][49] Question: Future sourcing strategy - The company aims to diversify sourcing away from China, focusing on Southeast Asia and India for better supply chain flexibility [51][52] Question: Shipping container pricing and country of origin - Management confirmed that shipping container pricing is based on ports and country of origin, and they feel well-positioned for 2025 [69][70] Question: Pricing strategy in response to tariffs - Management indicated that price increases will be implemented to cover tariff costs, with ongoing discussions with customers [81][82] Question: M&A activity in the current environment - Management noted a strong M&A pipeline but indicated that uncertainty around tariffs makes it challenging to determine business valuations [90][91]

Financial Data and Key Metrics Changes - Net sales for Q1 2025 totaled $359.3 million, an increase of 2.6% compared to Q1 2024, driven by the Intex acquisition and new business [15][16] - Adjusted EBITDA increased by 4.2% to $54.5 million, with adjusted EBITDA margins improving by 30 basis points to 15.2% [16][21] - Adjusted gross margins decreased to 46.9%, down from 47.6% in the prior year [16][21] Business Line Data and Key Metrics Changes - Hardware and Protective Solutions (HPS) segment net sales increased by 5.6%, with adjusted EBITDA rising by 15.8% to $37.4 million [17] - Robotics and Digital Solutions (RDS) net sales were up 1.9%, with adjusted gross margins and adjusted EBITDA margins slightly down [18] - Canadian business net sales decreased by 18.7% due to a 12% decline in existing home sales and economic uncertainty [19] Market Data and Key Metrics Changes - The company expects market volumes to decline approximately 17% in the second half of 2025, which is a conservative estimate given historical performance [9][45] - The impact of tariffs is estimated to be approximately $250 million on an annualized basis, with expectations to mitigate costs through price increases [7][25] Company Strategy and Development Direction - The company is implementing a dual faucet strategy to reduce reliance on Chinese suppliers from nearly 50% to approximately 20% by the end of 2025 [13] - Hillman aims to diversify its supply chain by sourcing from multiple countries, including Southeast Asia and India, to enhance flexibility and quality [48][49] - The company is focused on maintaining strong partnerships with customers and suppliers to navigate current challenges effectively [10][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in handling the tariff situation and believes the company is well-positioned to manage through current challenges [30] - The company anticipates a strong recovery in the home improvement market in the long term, despite short-term volume pressures [65] Other Important Information - The company has a strong M&A pipeline but is cautious about pursuing acquisitions due to current market uncertainties [87] - Free cash flow guidance has been withdrawn due to uncertainties surrounding tariffs and their impact on working capital [27] Q&A Session Summary Question: RDS business margins and future growth - Management acknowledged pressure on RDS margins due to the rollout but expects to return to a 30% EBITDA rate and 70% gross margins for the rest of the year [37] Question: Personal Protective business performance - Management confirmed no material pull forwards in the Personal Protective business and expressed satisfaction with its performance [38][39] Question: Volume assumptions for the full year - Management held guidance despite expecting a 17% decline in market volumes, emphasizing the unprecedented nature of the current tariff environment [45][46] Question: Future sourcing strategy - Management aims to reduce reliance on China and diversify sourcing to ensure quality and timely delivery [48][49] Question: Impact of tariffs on margins - Management indicated that pricing adjustments will be made dollar for dollar to cover tariff costs, which may impact long-term margin rates [55][56] Question: Comparison to COVID supply chain issues - Management noted that the current supply chain situation is better than during COVID, with strong service levels and supportive suppliers [63] Question: Shipping container pricing - Management confirmed that shipping container pricing is based on country of origin and expressed confidence in their contracts for 2025 [66][68]