CINCINNATI, Feb. 22, 2024 (GLOBE NEWSWIRE) — Hillman Solutions Corp. (NASDAQ:HLMN) (the “Company” or “Hillman”), a leading provider of hardware products and merchandising solutions, reported financial results for the thirteen and fifty-two weeks ended December 30, 2023.
Fiscal 2023 consisted of fifty-two weeks compared to fifty-three weeks during fiscal 2022 and the fourth quarter of fiscal 2023 consisted of thirteen weeks compared to fourteen weeks during fiscal 2022.
Fourth Quarter 2023 Highlights (Thirteen Weeks Ended December 30, 2023)
Net sales decreased 0.8% to $347.8 million compared to $350.7 million in the prior year quarter; excluding the 14th week during 2022, net sales increased 3.8% from $335.0 million in 2022
Net loss totaled $(10.1) million, or $(0.05) per diluted share, compared to net loss of $(13.9) million, or $(0.07) per diluted share, in the prior year quarter
Adjusted Diluted EPS1 was $0.10 per diluted share compared to $0.05 per diluted share in the prior year quarter
Adjusted EBITDA1 totaled $54.4 million compared to $45.0 million in the prior year quarter
Full Year 2023 Highlights (Fifty-Two Weeks Ended December 30, 2023)
Net sales decreased 0.7% to $1.48 billion as compared to $1.49 billion in the prior year period; excluding the 53rd week during 2022, net sales increased 0.4% from $1.47 billion in 2022
Net loss totaled $(9.6) million, or $(0.05) per diluted share, compared to a loss of $(16.4) million, or $(0.08) per diluted share, in the prior year period
Adjusted Diluted EPS1 was $0.41 per diluted share compared to $0.43 per diluted share in the prior year period
Adjusted EBITDA1 totaled $219.4 million compared to $210.2 million in the prior year period
Net cash provided by operating activities totaled $238.0 million compared to $119.0 million in the prior year period
Free Cash Flow1 totaled $172.3 million compared to $49.4 million in the prior year period
Balance Sheet and Liquidity at December 30, 2023
Gross debt was $761 million, compared to $919 million at the end of 2022; net debt1 outstanding was $722 million, compared to $888 million at the end of 2022
Liquidity available totaled approximately $285 million, consisting of $247 million of available borrowing under the revolving credit facility and $39 million of cash and equivalents
Net debt1 to trailing twelve month Adjusted EBITDA improved to 3.3x times from 4.2x at the end of 2022
Management Commentary
“2023 was a remarkable operational year for the Hillman team,” commented Doug Cahill, Chairman, President and Chief Executive Officer of Hillman. “During the year we paid down $160 million of debt and reduced our inventory by $100 million while maintaining fill rates over 94% for our customers – all while moving into our new Kansas City distribution hub. This is some of the best work I have seen a team do in my career and sets us up to be more efficient during 2024 and beyond.”
“Because of our success reducing inventory and generating cash, we improved our net debt to adjusted EBITDA ratio to 3.3 times, a reduction over nearly a full turn during the year. We were also able to execute new business wins with some of our biggest customers which helped offset the macro environment.
“Subsequent to the end of the year, we acquired Koch Industries, a leading provider of rope and chain, marking our entrance into a new product category. We are thrilled to welcome Koch to the Hillman family, and our sales and service team is already off to the races seeking out opportunities to grow that segment.
“During 2024 Hillman celebrates its 60th year in business – and we expect to continue to take great care of our customers seeing Adjusted EBITDA margins expand and cash flows normalize following a record cash flow year in 2023. We are confident we can drive strong results for our shareholders during 2024 and beyond.”
Full Year 2024 Guidance
Hillman has provided the following guidance based on its current view of the market and its performance expectations during the fifty-two weeks ended December 28, 2024.
Full Year 2024 Guidance
Net Sales
$1.475 to $1.555 billion
Adjusted EBITDA1
$230 to $240 million
Free Cash Flow1
$100 to $120 million
Adjusted EBITDA, Adjusted Diluted EPS, Net Debt, and Free Cash Flow are non-GAAP financial measures. Refer to the “Reconciliation of Adjusted EBITDA”, “Reconciliation of Adjusted Earnings per Share”, “Reconciliation of Net Debt” and “Reconciliation of Free Cash Flow” sections of this press release for additional information as well as reconciliations between the company’s GAAP and non-GAAP financial results.
Fourth Quarter and Full Year 2023 Results Presentation
Hillman plans to host a conference call and webcast presentation today, February 22, 2024, at 8:30 a.m. Eastern Time to discuss its results and guidance. Chairman, President, and Chief Executive Officer Doug Cahill, Chief Financial Officer Rocky Kraft, and Chief Operating Officer Jon Michael Adinolfi will host the results presentation.
Date: February 22, 2024
Time: 8:30 am Eastern Time
Listen-only Webcast: https://edge.media-server.com/mmc/p/m89p3d4r/
A webcast replay will be available approximately one hour after the conclusion of the call using the Audio-Only Webcast link above.
Hillman’s earnings release, results presentation, and 10-K are expected to be filed with the SEC and posted to its website, https://ir.hillmangroup.com, before the webcast presentation begins.
About Hillman Solutions Corp.
Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman Solutions Corp. (“Hillman”) and its subsidiaries are leading North American providers of complete hardware solutions, delivered with outstanding customer service to over 46,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & industrial customers. Leveraging its leading distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency. For more information on Hillman, visit www.hillmangroup.com.
Forward Looking Statements
You should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “target”, “goal”, “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) unfavorable economic conditions that may affect operations, financial condition and cash flows including spending on home renovation or construction projects, inflation, recessions, instability in the financial markets or credit markets; (2) increased supply chain costs, including raw materials, sourcing, transportation and energy; (3) the highly competitive nature of the markets that we serve; (4) the ability to continue to innovate with new products and services; (5) direct and indirect costs associated with the May 2023 ransomware attack, and our receipt of expected insurance receivables associated with that cyber security incident; (6) seasonality; (7) large customer concentration; (8) the ability to recruit and retain qualified employees; (9) the outcome of any legal proceedings that may be instituted against the Company; (10) adverse changes in currency exchange rates; or (11) regulatory changes and potential legislation that could adversely impact financial results.. The foregoing list of factors is not exclusive, and readers should also refer to those risks that are included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 30, 2023. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward looking statements.
Except as required by applicable law, the Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this communication to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Contact:
Michael Koehler
Vice President of Investor Relations & Treasury
513-826-5495
IR@hillmangroup.com
HILLMAN SOLUTIONS CORP.
Condensed Consolidated Statement of Net Income, GAAP Basis
(dollars in thousands)
Unaudited
Thirteen Weeks
Ended
December 30,
2023
Fourteen Weeks
Ended
December 31,
2022
Fifty-two Weeks
Ended
December 30,
2023
Fifty-three Weeks
Ended
December 31,
2022
Net sales
$
347,808
$
350,663
$
1,476,477
$
1,486,328
Cost of sales (exclusive of depreciation and amortization shown separately below)
185,304
198,330
828,956
846,551
Selling, warehouse, general and administrative expenses
116,234
114,980
452,110
480,993
Depreciation
14,392
16,077
59,331
57,815
Amortization
15,576
15,551
62,309
62,195
Other expense (income), net
12,002
2,005
12,843
(1,119
)
Income from operations
4,300
3,720
60,928
39,893
Interest expense, net
15,430
15,703
68,310
54,560
Loss before income taxes
(11,130
)
(11,983
)
(7,382
)
(14,667
)
Income tax (benefit) expense
(1,071
)
1,916
2,207
1,769
Net loss
$
(10,059
)
$
(13,899
)
$
(9,589
)
$
(16,436
)
Basic and dilutive loss per share
$
(0.05
)
$
(0.07
)
$
(0.05
)
$
(0.08
)
Weighted average basic and dilutive shares outstanding
194,903
194,468
194,722
194,249
HILLMAN SOLUTIONS CORP.
Condensed Consolidated Balance Sheets
(dollars in thousands)
Unaudited
December 30,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
38,553
$
31,081
Accounts receivable, net of allowances of $2,770 ($2,405 – 2021)
103,482
86,985
Inventories, net
382,710
489,326
Other current assets
23,235
24,227
Total current assets
547,980
631,619
Property and equipment, net of accumulated depreciation of $333,875 ($333,452 – 2021)
200,553
190,258
Goodwill
825,042
823,812
Other intangibles, net of accumulated amortization of $470,791 ($414,275 – 2021)
655,293
734,460
Operating lease right of use assets
87,479
66,955
Other assets
14,754
23,586
Total assets
$
2,331,101
$
2,470,690
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
140,290
$
131,751
Current portion of debt and finance lease liabilities
9,952
10,570
Current portion of operating lease liabilities
14,407
12,285
Accrued expenses:
Salaries and wages
22,548
15,709
Pricing allowances
8,145
9,246
Income and other taxes
6,469
5,300
Interest
343
697
Other accrued liabilities
20,966