Financial Data and Key Metrics Changes - Adjusted EBITDA increased by 18% to $68.4 million compared to $58 million in Q2 2023, with adjusted EBITDA margins improving to 18% [6][12][27] - Full year adjusted EBITDA guidance increased to a range of $240 million to $250 million, reflecting a 12% increase over 2023 [6][30] - Net sales for Q2 2024 totaled $379.4 million, essentially flat compared to the prior year quarter, with a revised full year net sales guidance of $1.44 billion to $1.48 billion, reflecting a 1% decrease from 2023 [7][10][30] Business Line Data and Key Metrics Changes - Hardware and Protective Solutions (HPS) net sales increased by 3.5%, driven by new business wins and contributions from the Koch acquisition [13] - Robotics and Digital Solutions (RDS) net sales decreased by 8%, impacted by softer traffic and discretionary spending [13][14] - Adjusted gross margins for the quarter improved to 48.7%, a 570-basis point increase from the previous year [12][26] Market Data and Key Metrics Changes - Canadian business net sales decreased by 10.1% compared to the prior year quarter, attributed to a softer market and economy [17] - Existing home sales in the U.S. have decreased significantly, impacting overall market volume [11] - Overall market volumes were down about 4% for the quarter, excluding new business wins and M&A [10] Company Strategy and Development Direction - The company plans to continue executing low-risk tuck-in acquisitions, with a focus on adjacent aisles, and expects to close on an acquisition similar to Koch by the end of Q3 [9][23] - Emphasis on product innovation and leveraging the Hillman Moat to drive growth and maintain competitive advantages [19][22] - The company aims to maintain operational efficiencies and margin management to support future growth, even in a challenging macro environment [30][31] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro environment is soft, impacting net sales expectations, but expressed optimism about future top-line growth prospects [7][8] - The company is confident in its ability to manage costs and maintain margins, similar to the performance seen in 2009 [6][31] - Management highlighted the importance of maintaining strong relationships with customers and executing well during the current cycle [17][19] Other Important Information - The company ended Q2 2024 with a net debt to trailing 12-month adjusted EBITDA ratio of 2.9 times, down from 4 times a year ago [8][29] - Free cash flow for Q2 was $42.5 million, a significant improvement from a cash use of $6 million in the previous quarter [12][28] - The company is focused on maintaining a strong balance sheet while pursuing growth opportunities [29] Q&A Session Summary Question: What areas is the company looking to expand into with M&A? - Management indicated that they are excited about a potential acquisition similar to Koch and mentioned categories like plumbing and electrical as areas of interest [36][37] Question: What is the visibility on home center foot traffic? - Management noted that foot traffic has been slightly less negative recently but remains challenging overall [38] Question: What has surprised management this year regarding market conditions? - Management expressed surprise at the market's stagnation after an initial positive outlook in early 2024, particularly noting the decline in DIY activity [39][40] Question: What is the outlook for RDS in the second half of the year? - Management is optimistic about RDS returning to growth in 2025, citing new machine capabilities and recent account acquisitions as key drivers [41][42] Question: How will the leadership transition impact the company? - Management stated that while there will be a new CEO, the strategic direction and day-to-day operations will remain consistent [55] Question: What is the current M&A pipeline like? - Management confirmed a healthy M&A pipeline with opportunities for multiple acquisitions per year, particularly in the $4 million to $8 million EBITDA range [56][58]

Hillman Solutions Corp. (HLMN) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 14.29%. A quarter ago, it was expected that this company would post earnings of $0.08 per share when it actually produced earnings of $0.10, delivering a surprise of 25%. Over the last four quarters, the c ...

Financial Performance - Net sales for Q2 2024 decreased by 0.2% to $379.4 million compared to $380.0 million in the prior year quarter[2] - Net income for Q2 2024 totaled $12.5 million, or $0.06 per diluted share, compared to $4.5 million, or $0.02 per diluted share, in the prior year quarter[2] - Adjusted EBITDA for Q2 2024 was $68.4 million, an increase from $58.0 million in the prior year quarter[2] - Year-to-date net sales for 2024 were $729.7 million, unchanged from the prior year period[2] - Net income for the twenty-six weeks ended June 29, 2024, was $11,043,000, a significant recovery from a net loss of $4,587,000 for the same period in 2023[14] - Adjusted EBITDA for the twenty-six weeks ended June 29, 2024, was $120,679,000, compared to $98,168,000 for the same period in 2023, reflecting a 22.9% increase[18] - Net income for the thirteen weeks ended June 29, 2024, was $12,535, compared to $4,545 for the same period last year, representing a significant increase[20] - Adjusted net income for the twenty-six weeks ended June 29, 2024, was $50,425, up from $37,339 in the prior year, reflecting a growth of 35.0%[20] - Adjusted diluted earnings per share (EPS) for the thirteen weeks ended June 29, 2024, was $0.16, compared to $0.13 for the same period last year, indicating a 23.1% increase[20] Cash Flow and Liquidity - Free Cash Flow for the first half of 2024 totaled $36.4 million, down from $78.0 million in the prior year period[2] - The company reported a net cash provided by operating activities of $76,476,000 for the twenty-six weeks ended June 29, 2024, down from $115,046,000 in the prior year[14] - Free cash flow for the twenty-six weeks ended June 29, 2024, was $36,398, down from $78,017 in the prior year, showing a decrease of 53.4%[25] - Net debt as of June 29, 2024, was $705,340, a decrease from $722,396 at the end of December 30, 2023, indicating improved liquidity[23] - Gross debt as of June 29, 2024, was $759,356, slightly down from $760,949 at the end of December 30, 2023[23] Guidance and Projections - Full year 2024 net sales guidance was updated to $1.44 to $1.48 billion, down from the original guidance of $1.475 to $1.555 billion[5] - Adjusted EBITDA guidance for 2024 was increased to $240 to $250 million from the original guidance of $230 to $240 million[5] Assets and Liabilities - Total current assets increased to $617,773,000 as of June 29, 2024, up from $547,980,000 on December 30, 2023, representing a 12.5% increase[5] - Total liabilities rose to $1,210,674,000 as of June 29, 2024, compared to $1,176,572,000 at the end of 2023, indicating a 2.9% increase[5] - Accounts receivable increased to $130,505,000 as of June 29, 2024, up from $103,482,000, which is a 26.1% increase[5] - Inventories increased to $411,928,000 as of June 29, 2024, compared to $382,710,000, reflecting a 7.6% increase[5] Capital Expenditures and Expenses - Capital expenditures for the twenty-six weeks ended June 29, 2024, were $40,078, compared to $37,029 in the prior year, reflecting an increase of 5.5%[25] - Stock compensation expense contributed $0.02 to adjusted EPS for the thirteen weeks ended June 29, 2024, consistent with the prior year[22] - Total adjusting items for the thirteen weeks ended June 29, 2024, amounted to $0.03, down from $0.04 in the same period last year[22] Debt Management - Gross debt decreased to $759.4 million from $760.9 million on December 30, 2023[3] - Net debt outstanding improved to $705.3 million from $722.4 million on December 30, 2023[3] - Long-term debt remained relatively stable at $732,097,000 as of June 29, 2024, compared to $731,708,000 at the end of 2023[5] - The company incurred a loss on debt restructuring of $3,008,000 during the twenty-six weeks ended June 29, 2024[14] Operational Efficiency - The company reported exceptional fill rates of 95% during the quarter, ensuring product availability for retail partners[3]

Core Insights - Hillman Solutions Corp. reported a slight decrease in net sales for the second quarter of 2024, with net sales of $379.4 million, down 0.2% from $380.0 million in the prior year quarter [3] - The company achieved a net income of $12.5 million, or $0.06 per diluted share, compared to $4.5 million, or $0.02 per diluted share, in the prior year quarter, indicating improved profitability [3] - Adjusted EBITDA for the second quarter was $68.4 million, up from $58.0 million in the prior year quarter, reflecting enhanced operational efficiency [3] Financial Performance - For the year-to-date period ending June 29, 2024, net sales remained unchanged at $729.7 million compared to the prior year period [3] - Year-to-date net income was $11.0 million, a significant recovery from a net loss of $(4.6) million in the prior year period [3] - Adjusted diluted EPS increased to $0.25 from $0.19 in the prior year period [3] Balance Sheet and Liquidity - As of June 29, 2024, gross debt was $759.4 million, a slight decrease from $760.9 million at the end of 2023 [4] - Net debt decreased to $705.3 million from $722.4 million at the end of 2023, indicating improved leverage [4] - The company had approximately $305.3 million in available liquidity, consisting of $251.2 million in borrowing capacity and $54.0 million in cash [4] Management Commentary - Management highlighted strong bottom-line performance driven by improved efficiencies and strong margins, despite market challenges [5] - The company maintained a fill rate of 95%, ensuring product availability for retail partners [5] - The strategic focus remains on controlling operational factors and positioning for future growth [5] Updated Guidance - The company updated its full-year 2024 guidance, lowering top-line revenue expectations while increasing bottom-line guidance, reflecting confidence in profitability through operational management [6][7] - The revised guidance for net sales is now projected between $1.44 billion and $1.48 billion, with adjusted EBITDA expected between $240 million and $250 million [2][6] Leadership Transition - A leadership transition is planned for January 1, 2025, with Jon Michael Adinolfi becoming President and CEO, and Doug Cahill transitioning to Executive Chairman [8]

Core Viewpoint - Hillman Solutions Corp. (HLMN) is expected to report a year-over-year increase in earnings driven by higher revenues, with a consensus EPS estimate of $0.14, reflecting a 7.7% increase compared to the previous year [1][3]. Earnings Expectations - The company is projected to generate revenues of $383.53 million, which is a 0.9% increase from the same quarter last year [13]. - The consensus EPS estimate has been revised down by 1.82% over the last 30 days, indicating a reassessment by analysts [13]. Earnings Surprise Prediction - The Earnings ESP (Expected Surprise Prediction) for Hillman Solutions Corp. is -5.46%, suggesting a bearish outlook from analysts regarding the company's earnings prospects [7]. - A negative Earnings ESP reading does not necessarily indicate an earnings miss, but it complicates the prediction of an earnings beat [6][8]. Historical Performance - Over the last four quarters, Hillman Solutions Corp. has beaten consensus EPS estimates three times, which may influence future earnings expectations [10]. - In the last reported quarter, the company was expected to post earnings of $0.08 per share but delivered $0.10, resulting in a surprise of +25% [17]. Analyst Sentiment - The current Zacks Rank for Hillman Solutions Corp. is 4 (Sell), which may affect investor sentiment and stock performance ahead of the earnings release [16]. - Analysts' revisions and the company's historical performance are critical factors in assessing future earnings potential [4][9].

Chairman, President, and Chief Executive Officer Doug Cahill; Chief Operating Officer Jon Michael Adinolfi; and Chief Financial Officer Rocky Kraft will host the results presentation. About Hillman Solutions Corp. Research analysts wishing to participate in the call's live question and answer session must register by clicking here: https://register.vevent.com/register/BI4136382679574780aa098fd7b4b61ca4 Investor Contact Michael Koehler Vice President of Investor Relations & Treasury 513-826-5495 IR@hillmangr ...

Core Insights - Hillman Solutions Corp. published its second annual Environmental, Social, and Governance (ESG) fact sheet, highlighting its ESG initiatives for the year ending December 31, 2023 [11] - The company emphasizes its commitment to sustainability, corporate governance, and social impact as integral to its business operations [1][12] - Hillman completed a three-year assessment of its Scope 1-3 Greenhouse Gas emissions from 2020 to 2022, establishing a baseline for future emissions measurement [12] ESG Achievements - The 2023 ESG report includes achievements and awards, such as being recognized as Vendor of the Year by two customers [3] - The report details corporate governance practices, including board composition metrics related to independence and diversity [3] - Statistics on workforce diversity, equity, inclusion, and employee engagement initiatives are highlighted [3] Company Overview - Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman is a leading provider of hardware solutions, serving over 40,000 locations [14] - The company focuses on delivering innovative product and merchandising solutions for various retail sectors, including home improvement centers and industrial customers [14] - Hillman aims to provide a "small business" experience with "big business" efficiency through its distribution and sales network [14]

Financial Data and Key Metrics Changes - Adjusted EBITDA increased by 30% to $52.3 million compared to $40.2 million in Q1 2023, with adjusted EBITDA margins improving by 340 basis points to 14.9% [9] - Net sales for Q1 2024 slightly increased to $350.3 million from $349.7 million in the prior year, reflecting a 0.2% growth [15][57] - Adjusted gross margins improved by 610 basis points to 47.6% from 41.5% in the year-ago quarter [9][57] - Free cash flow usage was $6.1 million, driven by inventory build and working capital related to the Koch acquisition [16][59] - Total net debt increased by $25.1 million to $747.5 million, with liquidity at approximately $242 million [52] Business Line Data and Key Metrics Changes - Hardware and Protective Solutions (HPS) saw a 2.4% increase in net sales, with Hardware (HS) growing by 4.6% while Protective Solutions (PS) sales decreased by 6.9% [18] - Robotics & Digital Solutions (RDS) net sales decreased by 9.2% to $55 million due to lower foot traffic and discretionary spending [20][21] - Canadian business net sales increased slightly, with adjusted EBITDA rising over 70% from Q1 2023 [32] Market Data and Key Metrics Changes - The macroeconomic landscape in the home improvement sector remains muted, with inflation and elevated mortgage rates impacting existing home sales [10] - Retailers reported negative foot traffic compared to last year, but expressed cautious optimism for the second half of the year [11] Company Strategy and Development Direction - The company is focused on strengthening its competitive moat and executing its growth strategy profitably, with an emphasis on M&A opportunities [64][66] - The Koch acquisition is expected to drive organic growth, with a target of at least 20% growth in net sales next year [49] - The company aims for long-term top-line growth in the high single to low teens and adjusted EBITDA growth in the low to mid-teens [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage costs and maintain profitability despite a challenging macro environment [63] - The company anticipates that a strong increase in existing home sales will occur when mortgage rates decline [17] - Management reiterated full-year guidance for net sales, adjusted EBITDA, and free cash flow, reflecting a cautious but optimistic outlook [61] Other Important Information - The company appointed Scott Moore as the new divisional president of RDS, expected to lead growth initiatives [23] - The MinuteKey 3.5 rollout is anticipated to significantly impact performance in the latter half of 2024 and into 2025 [31] Q&A Session Summary Question: Concerns about destocking in the market - Management indicated that they do not face destocking issues as they ship directly to stores, avoiding excess inventory in distribution centers [70] Question: Exposure to pro categories and potential opportunities - Management noted that while they do not compete directly in certain pro categories, they believe their strong relationship with Home Depot will allow them to benefit from their growth [71] Question: Expectations around transport costs and implications for gross margins - Management confirmed that they locked in contracted rates for 2024 and expect to maintain gross margins above 45% for the year [78] Question: Sustainability of Q1 gross margins - Management expects gross margins to remain above 45% for the full year, with potential slight decreases in the back half due to price givebacks [104] Question: Performance of RDS and its impact - Management acknowledged that RDS has been more impacted by macro factors compared to other business lines, attributing this to discretionary spending trends [112][124]

Earnings Presentation Q1 2024 9 1) Jefferies Research Services: July 10, 2023 Earnings Presentation Q1 2024 10 Appendix | --- | --- | --- | |-------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | Indispensable partner embedded with winning retailers | | | | Customers love us, trust us and rely on us | | | | Significant runway for incremental growth: Organic + M&A Market an ...

Hillman Solutions Corp. (HLMN) came out with quarterly earnings of $0.10 per share, beating the Zacks Consensus Estimate of $0.08 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 25%. A quarter ago, it was expected that this company would post earnings of $0.08 per share when it actually produced earnings of $0.10, delivering a surprise of 25%.Over the last four quarters, the compan ...