Hillman Solutions (HLMN) investor relations material

Executive summary

• Net sales rose 3.0% year-over-year to $370.1 million in Q1 2026, driven by new business wins and growth in robotics and digital solutions across all segments.

• Adjusted EBITDA declined to $50.1 million from $54.5 million, with margin compressing to 13.5% from 15.2%.

• Net loss widened to $(4.7) million, or $(0.02) per diluted share, compared to $(0.3) million in Q1 2025.

• Closed two acquisitions post-quarter: Campbell Chain & Fittings and Delaney Hardware, expanding industrial MRO and pro distribution channels, expected to add $30 million in 2026 net sales.

• Repurchased 1.2 million shares for $10.1 million during the quarter at an average price of $8.29.

Financial highlights

• Adjusted gross margin declined to 45.6% from 46.9% year-over-year; Adjusted EBITDA margin fell to 13.5% from 15.2%.

• Free cash flow for Q1 2026 was negative $34.3 million, reflecting seasonal working capital build.

• Net cash used for operating activities was $19.5 million, mainly due to seasonal working capital needs.

• Gross debt increased to $737.8 million; net debt at quarter-end was $710.1 million; net debt/TTM Adjusted EBITDA: 2.6x.

• Liquidity available totaled $282 million, including $254.7 million in revolving credit and $27.7 million in cash.

Outlook and guidance

• Full-year 2026 net sales guidance raised to $1.63–$1.73 billion (midpoint $1.68 billion), reflecting recent acquisitions and representing 8% growth over 2025.

• Full-year Adjusted EBITDA expected between $275–$285 million; free cash flow between $100–$120 million.

• Adjusted gross margin for 2026 projected at 46–47%, with sequential improvement expected through the year.

• Long-term targets: 8–12% revenue CAGR, low double-digit adjusted EBITDA CAGR, leverage at or below 2.5x, and high-teens ROIC.

• Management expects continued cost pressures from tariffs and inflation, with ongoing focus on pricing actions and cost controls.