Hillman Solutions Corp. Q4 FY2025 earnings call

• Michael Koehler introduced Hillman Group, its history, products, and differentiation. • Jon Michael Adinolfi noted Hillman successfully navigated tariffs in 2025, achieving record net sales and adjusted EBITDA. • Discussed 2026 guidance, including net sales, adjusted EBITDA, and free cash flow estimates. • Talked about business segments' performance in 2025. • Mentioned M&A pipeline is healthy with bolt-on acquisition opportunities. • Announced first Investor Day on March 19 to detail pro business plans.

Hardware and Protective Solutions (HPS) was the biggest business. HPS net sales increased 7.8% to $1,200,000,000, and adjusted EBITDA increased by 26% to $196,300,000. Robotics and Digital Solutions (RDS) returned to growth with net sales increasing 1.6% to $220,200,000. Canadian business had net sales down 0.6% compared to prior year, with new business wins partially offset by soft market volumes and FX headwind.

• Full year 2026 net sales estimated between $1,600,000,000 and $1,700,000,000, midpoint $1,650,000,000 (6.3% growth from 2025). • Adjusted EBITDA expected between $275,000,000 and $285,000,000, midpoint $280,000,000 (1.7% growth from 2025). • Free cash flow expected between $100,000,000 and $120,000,000, midpoint $110,000,000. • 2026 adjusted gross margins expected between 46%–47%. • CapEx expected between $70,000,000 and $75,000,000.

Q: Can you walk through the cadence of gross margins?

A: First quarter likely slightly below 46%-47% due to high-cost inventory, expected to step up sequentially in Q2 and be at high end in back half.

Q: What gives confidence in new business wins in 2026?

A: Solid initiatives, national sales meeting, business development team, pro business focus, and products shown at International Builders Show.

Q: Any thoughts on Canada in 2026?

A: Still under pressure but sales team is fired up, expecting return to growth in spring.

Q: How to think about incremental EBITDA margin?

A: Expect anything and everything to be above fleet, plus 20% for most business, more for RDS.

Q: Thoughts on M&A environment?

A: More excited now, expecting 1-2 deals in 2026 with opportunities coming back and new ones emerging