Hillman Solutions (HLMN) Q1 2026 earnings summary

Executive summary

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

• 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.

• Two acquisitions closed post-quarter: Campbell Chain & Fittings and Delaney Hardware, expected to add $30 million in 2026 net sales and expand industrial MRO and pro distribution presence.

• 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 was 13.5%, down from 15.2%.

• Net cash used for operating activities was $19.5 million; free cash flow was $(34.3) million.

• 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.

• SG&A expenses rose to $124.6 million (33.7% of sales), up 4.6% from the prior year.

Outlook and guidance

• FY 2026 net sales guidance raised to $1.63–$1.73 billion (midpoint $1.68 billion), reflecting 8% growth and recent acquisitions.

• Adjusted EBITDA and free cash flow guidance maintained at $275–$285 million and $100–$120 million, respectively.

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

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

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