Core Insights - Hillman Solutions Corp. reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.16 per share a year ago, resulting in an earnings surprise of +22.22% [1] - The company posted revenues of $424.94 million for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.25%, but up from $393.3 million year-over-year [2] - Hillman Solutions Corp. shares have underperformed the market, losing about 4.7% since the beginning of the year compared to the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $377.5 million, and for the current fiscal year, it is $0.54 on revenues of $1.57 billion [7] - The estimate revisions trend for Hillman Solutions Corp. was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Building Products - Miscellaneous industry, to which Hillman Solutions Corp. belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact investor sentiment [5]

Financial Data and Key Metrics Changes - Hillman reported record net sales of $424.9 million for Q3 2025, an increase of 8% year-over-year [11][14] - Adjusted EBITDA rose 36% to $88 million, marking the highest adjusted EBITDA in the company's history [11][14] - Adjusted gross margin improved by 350 basis points to 51.7% compared to the prior year [11][14] - Leverage improved to 2.5 times from 2.7 times in the previous quarter [3][16] Business Segment Data and Key Metrics Changes - The Hardware and Protective Solutions (HPS) segment grew by 10% year-over-year, with adjusted EBITDA increasing by 57.3% to $65.8 million [12] - Robotics and Digital Solutions (RDS) saw a 3.3% increase in net sales, marking the third consecutive growth quarter [12] - Canadian business net sales were nearly flat, down 0.2% year-over-year, impacted by soft market volumes and foreign exchange [13] Market Data and Key Metrics Changes - Existing home sales in the U.S. are approximately 20% below the 10-year average, affecting market volumes [6] - Market volumes are expected to decline by 7% in the second half of 2025, with a cautious outlook for Q4 [45][61] Company Strategy and Development Direction - Hillman is focused on maintaining strong customer relationships and operational efficiency to navigate tariff challenges [9][10] - The company is optimistic about future growth opportunities, particularly as macroeconomic indicators improve [4][21] - Hillman plans to continue its dual-sourcing strategy to mitigate tariff impacts and enhance supply chain flexibility [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite current market headwinds, with expectations for continued growth into 2026 [3][21] - The company anticipates a high single to low double-digit growth in net sales for 2026, driven by rollover price and new business wins [20][61] - Management acknowledged the challenges posed by tariffs but emphasized the company's resilience and adaptability [9][10] Other Important Information - Hillman has initiated a $100 million share repurchase program, with $3.2 million deployed to buy back shares in Q3 2025 [16][17] - The company has paid down over $240 million of debt while reducing leverage significantly over the past three years [7][16] Q&A Session Summary Question: Competitive opportunities or pressures from suppliers - Management noted that they see several business opportunities arising from competitors facing challenges in the current environment [25] Question: Order patterns from largest retail customers - Order patterns have been consistent, with strong relationships maintained with retail partners [26] Question: Changes in 2026 outlook - Management reiterated their previous outlook for 2026, expecting high single to low double-digit growth in a flat market [27] Question: Impact of tariffs on market volumes - Management indicated that it is difficult to determine the exact impact of tariffs on consumer demand, but they remain cautiously optimistic [45] Question: Pricing and customer receptiveness - Management stated that pricing has played out as expected, with customers understanding the need for price adjustments due to tariffs [53] Question: M&A activity outlook - There has been an increase in inbound M&A interest, and management is optimistic about future opportunities [81]

Financial Performance - Net sales increased by 80% to $4249 million in Q3 2025 compared to Q3 2024[8] - GAAP net income totaled $232 million or $012 per diluted share compared to $74 million or $004 per diluted share in Q3 2024[8] - Adjusted EBITDA increased to $880 million compared to $648 million in Q3 2024[8] - Adjusted EBITDA margins were 207% compared to 165% in Q3 2024[8] - Net Debt / Adjusted EBITDA (ttm) was 25x at quarter end compared to 28x on December 28 2024[8] - The company reiterated its Net Sales guidance of $1535 to $1575 billion for FY 2025 and year-end leverage of 24x while raising the midpoint of its Adjusted EBITDA guidance to $270 to $275 million[27] Operational Highlights - YTD fill rates averaged 97%[9] - The company repurchased $32 million shares of its common stock at an average price of $972 per share[9] Segment Performance (Q3 2025 vs Q3 2024) - Hardware and Protective Solutions ("HPS") revenues increased by 100% with Adjusted EBITDA increasing by 573%[8, 13] - Robotics and Digital Solutions ("RDS") revenues increased by 33% while Adjusted EBITDA decreased by (02)%[8, 13] - Canada revenues decreased by (02)% with Adjusted EBITDA decreasing by (158)%[8, 13] Supply Chain - The company has lowered its exposure to suppliers based in China from 49% in 2018 to 32% YTD 2025[19] - The company is working towards having the ability to source ~20% from China by the end of 2025[20]

Financial Performance - Net sales increased by 8.0% to a record $424.9 million compared to $393.3 million in the prior year quarter[5] - Net income totaled $23.2 million, or $0.12 per diluted share, compared to $7.4 million, or $0.04 per diluted share, in the prior year quarter[5] - Adjusted EBITDA increased to a record $88.0 million compared to $64.8 million in the prior year quarter[5] - Net income for the thirty-nine weeks ended September 27, 2025, was $38,707,000, a 109% increase from $18,477,000 for the same period in 2024[19] - Adjusted EBITDA for the thirty-nine weeks ended September 27, 2025, was $217,780,000, up 17.4% from $185,484,000 in the prior year[23] - Adjusted diluted earnings per share for the thirty-nine weeks ended September 27, 2025, was $0.48, compared to $0.39 for the same period in 2024, reflecting a 23.1% increase[26] Cash Flow and Investments - Free Cash Flow totaled $9.1 million compared to $39.6 million in the prior year quarter[5] - Cash flows from operating activities provided $74,289,000, a decrease of 47% compared to $140,187,000 for the thirty-nine weeks ended September 28, 2024[19] - Net cash used for investing activities was $55,501,000, a significant reduction from $122,169,000 in the previous year[19] - Free cash flow for the thirteen weeks ended September 27, 2025, was $9,065,000, compared to $39,593,000 for the same period in 2024, indicating a decrease of approximately 77%[31] - For the thirty-nine weeks ended September 27, 2025, free cash flow was $18,942,000, down from $75,991,000 in the prior year, representing a decline of about 75%[31] - Net cash provided by operating activities for the thirteen weeks ended September 27, 2025, was $26,237,000, compared to $63,711,000 for the same period in 2024, a decrease of approximately 59%[31] - Capital expenditures for the thirteen weeks ended September 27, 2025, were $17,172,000, down from $24,118,000 in the same period in 2024, reflecting a reduction of about 29%[31] - For the thirty-nine weeks ended September 27, 2025, capital expenditures totaled $55,347,000, compared to $64,196,000 in the prior year, a decrease of approximately 14%[31] - The company emphasizes that free cash flow is a critical indicator of cash generated by business operations and available for investment and debt obligations[30] Debt and Liquidity - Gross debt was $709.5 million compared to $718.6 million on December 28, 2024[5] - Net debt to trailing twelve month Adjusted EBITDA improved to 2.5x at quarter end compared to 2.8x on December 28, 2024[5] - Liquidity available totaled $276.9 million, consisting of $239.2 million of available borrowing under the revolving credit facility and $37.7 million of cash and equivalents[5] - Net debt as of September 27, 2025, was $671,791,000, slightly down from $674,045,000 at the end of December 28, 2024[29] Stock and Shareholder Actions - Hillman repurchased approximately 325.6 thousand shares of its common stock at an average price of $9.72 per share, totaling $3.2 million[5] Depreciation and Expenses - The company reported a depreciation and amortization expense of $105,280,000 for the thirty-nine weeks ended September 27, 2025, compared to $96,440,000 in the prior year[19] - The company incurred $10,739,000 in stock-based compensation expense for the thirty-nine weeks ended September 27, 2025, up from $9,742,000 in the prior year[19] Accounts Receivable - Accounts receivable net change was $(34,721,000), indicating a higher collection period compared to $(22,906,000) in the previous year[19] Cash and Cash Equivalents - Cash and cash equivalents at the end of the period were $37,731,000, down from $59,820,000 at the end of September 28, 2024[19]

Core Insights - Hillman Solutions Corp. reported record financial results for the third quarter of 2025, achieving the highest Net Sales and Adjusted EBITDA in its 61-year history [4][7] - The company has updated its full-year 2025 guidance, maintaining its Net Sales forecast while increasing its Adjusted EBITDA guidance [5][6] Financial Performance - Net sales increased by 8.0% to $424.9 million compared to $393.3 million in the same quarter last year [7] - Net income rose to $23.2 million, or $0.12 per diluted share, up from $7.4 million, or $0.04 per diluted share, in the prior year quarter [7] - Adjusted EBITDA reached a record $88.0 million, compared to $64.8 million in the prior year quarter [7] Guidance and Projections - The updated guidance for FY 2025 includes Net Sales of $1.535 to $1.575 billion and Adjusted EBITDA of $270 to $275 million [6] - Year-end leverage is expected to remain at 2.4x [6] Balance Sheet and Liquidity - As of September 27, 2025, gross debt was $709.5 million, down from $718.6 million at the end of 2024 [7] - Net debt improved to $671.8 million from $674.0 million at the end of 2024 [7] - Liquidity available totaled $276.9 million, consisting of $239.2 million in available borrowing and $37.7 million in cash [7] Shareholder Actions - The company repurchased approximately 325.6 thousand shares of its common stock at an average price of $9.72 per share, totaling $3.2 million [7]

Group 1 - Conestoga Capital Advisors reported a -1.4% return for its Small Cap Composite in Q3 2025, underperforming the Russell 2000 Growth Index, which gained 12.2% [1] - The equity markets reached new all-time highs in Q3 2025, continuing the momentum that began in early April [1] - The gains in the Russell 2000 Growth Index were primarily driven by low-quality stocks, particularly unprofitable, high-beta names [1] Group 2 - Hillman Solutions Corp. (NASDAQ:HLMN) experienced a one-month return of -0.64% and a 52-week loss of 13.06%, closing at $9.32 per share with a market capitalization of $1.842 billion on October 17, 2025 [2] - Hillman Solutions Corp. is recognized as a leading provider of hardware and protective solutions, with resilient demand for its products despite a mixed retail environment [3] - The company reported net sales of $402.8 million in Q2 2025, reflecting a 6.2% increase compared to Q2 2024, and improved free cash flow through cost efficiencies and better working capital management [4]

Core Insights - Hillman Solutions Corp. plans to host a conference call on November 4, 2025, to discuss its financial results for the thirteen and thirty-nine weeks ended September 27, 2025 [1][4] - The earnings release will be issued on the same day prior to the results presentation [1][4] - The presentation will be hosted by President and CEO Jon Michael Adinolfi and CFO Rocky Kraft [2] Presentation Details - Date: November 4, 2025 [3] - Time: 8:30 a.m. Eastern Time [3] - A listen-only webcast will be available [3] - Sell-side analysts must register to participate in the live Q&A session [3] - A replay of the webcast will be available approximately one hour after the presentation [3] Company Overview - Hillman Solutions Corp. is a leading provider of hardware-related products and solutions in North America [5] - The company has a strong commitment to customer service and a competitive advantage through direct-to-store shipping and a dedicated sales team of over 1,200 professionals [5] - Hillman's product portfolio includes hardware solutions, protective solutions, and robotic and digital solutions [5] - The company is recognized for its distribution network and has received vendor of the year awards from top customers [5]

Core Viewpoint - Hillman Solutions Corp. (HLMN) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][6]. - For Hillman Solutions Corp., the recent upgrade reflects an improvement in the company's underlying business, suggesting that investor sentiment may drive the stock price higher [5][10]. Earnings Estimate Revisions - Hillman Solutions Corp. is projected to earn $0.55 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Hillman Solutions Corp. has increased by 2.2%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, highlighting their potential for market-beating returns [9][10]. - Hillman Solutions Corp.'s upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a favorable outlook for the stock in the near term [10].

Group 1 - Madison Small Cap Fund's second-quarter 2025 investor letter indicates a rebound in equities following a pause in tariff implementation, with the Russell 2000 Index up 8.5% for the quarter [1] - The Madison Small Cap Fund (class Y) returned 4.42% in the quarter, underperforming compared to the Russell 2000 and Russell 2500 indices [1] - Hillman Solutions Corp. (NASDAQ:HLMN) reported net sales of $402.8 million in Q2 2025, a 6.2% increase from Q2 2024 [3] Group 2 - Hillman Solutions Corp. (NASDAQ:HLMN) has experienced a one-month return of -1.34% and a 52-week loss of 10.32%, with a market capitalization of $1.889 billion as of September 17, 2025 [2] - The decision was made to exit Hillman Solutions Corp. in favor of GMS, which is perceived to have stronger competitive advantages and better long-term growth prospects [3] - Hillman Solutions Corp. is not among the 30 most popular stocks among hedge funds, with 24 hedge fund portfolios holding its stock at the end of Q2 2025, up from 21 in the previous quarter [3]

Core Viewpoint - Hillman Solutions Corp. (HLMN) has seen a 27.5% increase in share price over the past four weeks, closing at $9.88, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $12.5, representing a 26.5% upside [1]. Price Targets - The average price target consists of eight short-term estimates ranging from a low of $10.00 to a high of $15.00, with a standard deviation of $1.77, indicating variability among analysts [2]. - The lowest estimate suggests a 1.2% increase from the current price, while the highest estimate indicates a potential upside of 51.8% [2]. Analyst Sentiment - Analysts show a consensus that HLMN will report better earnings than previously estimated, which strengthens the outlook for the stock [4]. - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 3.1%, with two estimates moving higher and no negative revisions [12]. Zacks Rank - HLMN currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating a strong potential upside [13]. Caution on Price Targets - While price targets are a common metric for investors, relying solely on them may not be prudent due to concerns about analysts' biases and the accuracy of their estimates [3][7][10]. - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement, which can serve as a starting point for further research [9].