Hillman Accelerated Sales Growth and Raised Outlook
Free cash flow more than doubled to $70.2 million as operating cash flow climbed.
Hillman Solutions (HLMN), a provider of hardware and home-improvement products, accelerated second-quarter sales growth to 9.8% and raised its full-year outlook.
Net sales increased to $442.3 million from a year earlier, after growing 3.0% in the first quarter and 4.5% in the fourth quarter of 2024. Sales rose 19.5% sequentially from the first quarter, marking a sharp pickup in the company's growth trajectory.
Net income rose 33.4% to $21.1 million from $15.8 million, while diluted earnings increased to $0.11 a share from $0.08. Hillman had posted a first-quarter loss of $4.7 million, or $0.02 a share. Adjusted earnings held at $0.17 a share, following a decline to $0.07 in the first quarter from $0.10 a year earlier.
Profitability lagged the sales acceleration. Adjusted earnings before interest, taxes, depreciation and amortization increased 2.5% to $77.1 million, compressing the adjusted EBITDA margin to about 17.4% from 18.7%. Gross margin narrowed to about 47.1% as cost of sales rose faster than revenue, though GAAP operating margin edged higher to roughly 9.3%.
Robotics and Digital Solutions grew at a low-double-digit rate, accelerating from mid-single-digit growth in the first quarter with help from the MinuteKey 3.5 rollout.
Hillman now expects 2025 net sales of $1.670 billion to $1.720 billion, raising the midpoint by $15 million to $1.695 billion. It expects adjusted EBITDA of approximately $285 million, compared with its previous range of $275 million to $285 million. Free-cash-flow guidance narrowed to $105 million to $115 million, leaving the midpoint unchanged.
The company also agreed to acquire industrial fastener distributor Kanebridge for $315 million, a deal expected to close around the start of the fourth quarter and expand Hillman's industrial addressable market to $3 billion. Net leverage had improved to 2.4 times trailing adjusted EBITDA as net debt declined to $665.4 million, giving Hillman a stronger balance-sheet position ahead of the transaction.