Hillman Solutions (HLMN) Q4 2025 earnings summary

Executive summary

• Achieved record 2025 net sales of $1.552 billion, up 5.4% year-over-year, and record adjusted EBITDA of $275.3 million, up 13.9% from 2024.

• Returned to profitability with 2025 net income of $40.3 million, up from $17.3 million in 2024, and Q4 net income of $1.6 million, reversing a prior year loss.

• Successfully navigated tariff impacts and maintained strong customer service, with pricing actions offsetting higher costs.

• 2026 guidance targets net sales of $1.6–$1.7 billion and adjusted EBITDA of $275–$285 million, with continued focus on new business wins, operational efficiency, and strategic M&A.

• Management expects continued top and bottom line growth, supported by ongoing investments and supply chain diversification.

Financial highlights

• 2025 net sales rose by $80 million, driven by acquisitions, new business, and pricing, despite a 5% decline in market volumes.

• Adjusted gross profit margin for 2025 increased 60 bps to 48.7%; adjusted EBITDA margin improved to 17.7% from 16.4%.

• Adjusted diluted EPS for 2025 was $0.58, up from $0.49 in 2024; Q4 adjusted EPS was flat at $0.10.

• Free cash flow for 2025 was $35.1 million, impacted by $65 million in tariffs; net debt reduced to $665.8 million.

• Free cash flow conversion for 2025 was 30%, down from 101% in 2024.

Outlook and guidance

• 2026 net sales guidance: $1.6–$1.7 billion (midpoint $1.65 billion), up 6.3% at midpoint.

• 2026 adjusted EBITDA guidance: $275–$285 million (midpoint $280 million).

• 2026 free cash flow guidance: $100–$120 million, with over 90% conversion of adjusted net income.

• Adjusted gross margin expected to normalize to 46–47% in 2026, with Q1 as the low point due to high-cost inventory.

• CapEx planned at $70–$75 million for 2026, focused on MiniKey 3.5 expansion and merchandising solutions.