Hillman Solutions Corp. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the thirteen-week period ended March 28, 2026. Hillman Solutions Corp. operates three segments: Hardware and Protective Solutions, Robotics and Digital Solutions, and Canada. The company provides hardware products, fasteners, personal protective equipment, and key duplication services to retail outlets in North America.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $370.1 million | $359.3 million |
| Net Loss | $(4.7) million | $(0.3) million |
| Diluted EPS | $(0.02) | $(0.00) |
| Adjusted EBITDA | $50.1 million | $54.5 million |
| Operating Cash Flow | $(19.5) million | $(0.7) million |
| Total Debt (Net) | $728.9 million | $693.1 million |
| Cash and Equivalents | $27.7 million | $36.3 million |
| Working Capital | $442.8 million | $388.9 million |
Note: Total Debt calculated as Current portion ($14.9M) + Long-term debt ($714.1M).
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 3.0% year-over-year, driven by new business wins in all segments. The Canada segment saw the highest growth at 15.1%, while Hardware and Protective Solutions grew 1.2%.
- Profitability Decline: Income from operations dropped 52.0% to $7.2 million, primarily due to increased cost of sales (tariffs, product costs) and higher SG&A expenses. Hardware and Protective Solutions operating income fell 65.0%.
- Net Loss Expansion: Net loss widened to $4.7 million from $0.3 million, impacted by higher operating costs and interest expense, despite a reduction in interest rates from a 2025 refinancing.
- Cash Flow: Operating cash flow turned negative at $19.5 million used, compared to $0.7 million used in the prior year, due to seasonal increases in accounts receivable and inventory, and timing of supplier payments.
- Capital Allocation: The company repurchased $10.1 million of common stock and utilized $47.2 million in net revolver borrowings to fund capital expenditures ($14.8 million).
Outlook, Risks, and Unusual Items
- Tariff Litigation: Following a Supreme Court decision invalidating IEEPA tariffs, Hillman filed a lawsuit on April 15, 2026, seeking a full refund of paid tariffs. The financial impact is uncertain but could be material; no adjustments have been recorded yet.
- Acquisitions: Subsequent to the quarter end, the company completed acquisitions of Campbell Chain and Fittings (April 3) and Delaney Hardware (April 10), which will be integrated into the Hardware and Protective Solutions segment.
- Cost Pressures: Management cites inflationary pressures, supply chain costs, and tariffs as headwinds. The company is implementing price increases to offset these costs.
- Liquidity: The company maintains $254.7 million in available borrowings under its revolving credit facility. Management expects to generate sufficient operating cash flows for short-term needs.
Investor Verification Checklist
- Verify the timeline and potential recovery amount of the IEEPA tariff refund lawsuit filed in April 2026.
- Monitor the integration progress and financial contribution of the Campbell Chain and Delaney Hardware acquisitions.
- Assess the sustainability of the 3.0% revenue growth given the reported "low double digit volume declines" in core performance.
- Review the impact of the $19.5 million operating cash outflow on future liquidity and working capital management.
- Track the execution of the $100 million share repurchase program, of which $22.5 million has been utilized to date.