CINCINNATI — Hillman Solutions Corp., a leading provider of hardware products and merchandising solutions, on Wednesday reported financial results for the 13 and 39 weeks ended Sept. 30, 2023.
Third Quarter 2023:
- Net sales increased 5.4% to $398.9 million compared to $378.5 million in the prior year quarter
- Net income totaled $5.1 million, or $0.03 per diluted share, compared to net loss of $(9.5) million, or $(0.05) per diluted share, in the prior year quarter
- Adjusted diluted EPS was $0.11 per diluted share compared to $0.14 per diluted share in the prior year quarter
- Adjusted EBITDA totaled $66.8 million compared to $59.0 million in the prior year quarter
YTD 2023 Highlights:
- Net sales decreased (0.6)% to $1,128.7 million compared to $1,135.7 million in the prior year period
- Net income totaled $0.5 million, or $0.00 per diluted share, compared to net loss of $(2.5) million, or $(0.01) per diluted share, in the prior year period
- Adjusted diluted EPS1 was $0.30 per diluted share compared to $0.38 per diluted share in the prior year period
- Adjusted EBITDA totaled $165.0 million compared to $165.3 million in the prior year period
- Net cash provided by operating activities totaled $171.5 million compared to $63.2 million in the prior year period
- Free Cash Flow totaled $119.3 million compared to $16.8 million in the prior year period
Balance Sheet and Liquidity at September 30, 2023
- Gross debt was $811.1 million, compared to $918.8 million on December 31, 2022; net debt1 outstanding was $771.8 million, compared to $887.7 million on December 31, 2022
- Liquidity available totaled approximately $291.2 million, consisting of $251.9 million of available borrowing under the revolving credit facility and $39.3 million of cash and equivalents
Doug Cahill, chairman, president and chief executive officer of Hillman, said:
“During the quarter our team successfully navigated the challenging macroeconomic environment to produce mid-single-digit top line growth and double-digit Adjusted EBITDA growth. Margins improved to historical norms, driven by strength in our Hardware and Protective Solutions segment, lower priced inventory being sold, and the resilience of Hillman’s competitive moat. Additionally, we continued to reduce inventory which, together with our improved bottom line, has driven robust year to date free cash flow of $119.3 million. We used this free cash flow to pay down debt, allowing us to improve our net debt to adjusted EBITDA ratio to 3.7 times continuing the downward trend for the fifth straight quarter.”
“Hillman has proven resilient throughout multiple economic cycles. Despite lower foot traffic at our customers, our business remains partially insulated because of our focus on small ticket items used for necessary repair and maintenance projects. We expect gross margins to expand sequentially into the fourth quarter as we derive the benefits of new business wins, our prior pricing actions, and prudent cost controls. We have narrowed our top and bottom line guidance within our original range to reflect the macro environment. We continue to see our business produce free cash flow at healthy levels, which gives us confidence to increase our free cash flow outlook for the year. We look forward to entering 2024 on solid footing to capture market share and with a much stronger balance sheet to build additional value in our company.”
Full Year 2023 Guidance
Based on year-to-date performance and improved visibility on the remainder of the year, management is updating its full year 2023 guidance originally provided on Feb. 27, 2023.
