NASDAQ:HLMN Hillman Solutions Q2 2025 Earnings Report $10.07 +0.38 (+3.92%) Closing price 08/22/2025 04:00 PM EasternExtended Trading$10.07 0.00 (0.00%) As of 08/22/2025 06:32 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Hillman Solutions EPS ResultsActual EPS$0.17Consensus EPS $0.15Beat/MissBeat by +$0.02One Year Ago EPSN/AHillman Solutions Revenue ResultsActual Revenue$402.80 millionExpected Revenue$389.45 millionBeat/MissBeat by +$13.36 millionYoY Revenue Growth+6.20%Hillman Solutions Announcement DetailsQuarterQ2 2025Date8/5/2025TimeBefore Market OpensConference Call DateTuesday, August 5, 2025Conference Call Time8:30AM ETUpcoming EarningsHillman Solutions' Q3 2025 earnings is scheduled for Tuesday, November 4, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Hillman Solutions Q2 2025 Earnings Call TranscriptProvided by QuartrAugust 5, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: In Q2 Hillman delivered 6.2% net sales growth and 10.1% adjusted EBITDA increase, with EBITDA margins up 70 bps to 18.7%. Positive Sentiment: Raised full-year 2025 guidance to $1.535 B–$1.575 B in net sales (4–7% growth) and $265 M–$275 M in adjusted EBITDA (10–14% growth). Positive Sentiment: Board approved a $100 M share repurchase program, targeting $20 M–$25 M annually to offset dilution and capitalize on valuation opportunities. Positive Sentiment: Continued executing a “dual faucet” supply chain strategy, reducing China sourcing from ~50% in 2018 to ~20% by YE 2025 and covering an estimated $150 M annual tariff run rate. Negative Sentiment: Canadian segment net sales declined 5.6% in Q2 due to soft market volumes and FX headwinds, despite sequential improvement into the spring season. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallHillman Solutions Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipantsPresentationSkip to Participants Operator00:00:00Good morning, and welcome to the Second Quarter twenty twenty five Results Presentation for Hillman Solutions Corp. My name is Towanda, and I will be your conference call operator today. Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. The company's earnings release presentation and 10 Q were issued this morning. These documents and a replay of today's presentation can be accessed on the Hillman's Investor Relations website at ir.hillmangroup.com. Operator00:00:34I would now like to turn the call over to Michael Koehler with Hillman. Michael KoehlerVP of Investor Relations & Treasury at Hillman Solutions00:00:39Thank you, Tawanda. Good morning, everyone, and thank you for joining us. I'm Michael Kahler, Vice President of Investor Relations and Treasury. Joining me on today's call are Hillman's President and Chief Executive Officer, John Michael Adinolfi, or JMA as we call him, and Hillman's Chief Financial Officer, Rocky Kraft. Before we get into today's call, I would like to remind our audience that certain statements made today may be considered forward looking and are subject to the Safe Harbor provisions of applicable securities laws. Michael KoehlerVP of Investor Relations & Treasury at Hillman Solutions00:01:05These forward looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions and other factors, many of which are beyond the company's control and may cause actual results to differ materially from those projected in such statements. Some of those factors that could influence our results are contained in our periodic and annual reports filed with the SEC. For more information regarding these risks and uncertainties, please see slide two in our earnings call slide presentation, which is available on our website, ir.hillmangroup.com. In addition, on today's call, we will refer to certain non GAAP financial measures. Information regarding our use of and reconciliations of these measures to our GAAP results are available in our earnings call slide presentation. Michael KoehlerVP of Investor Relations & Treasury at Hillman Solutions00:01:50JMA will begin today's call by providing some commentary on our strong second quarter results and then give an update on our guidance. Following JMA's comments, Rocky will give a more detailed walk through our financials and guidance before turning the call back over to JMA for some closing comments. Then we will open the call up for your questions. It's now my pleasure to turn the call over to our President and CEO, John Michael Adonolfi. JMA? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:02:14Thanks, Michael. Good morning, everyone, and thank you for joining us. We executed well and took great care of our customers during the 2025, driving strong results on both the top and bottom line. We are pleased with our results for the first half of the year and are positioned well for continued top and bottom line growth in the second half of the year. Let me take a moment to provide an update on some topics we discussed last quarter. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:02:40We told you that our business is well positioned to operate in any environment, and we delivered solid results during both quarters this year. We told you that we would cover tariff related cost increases, and we have. We told you that the resilience of Hillman's business should prove volumes to be better than our guide, and they were. We told you that we would optimize the country of origin where we source our products with our dual faucet strategy, and we have. The Hillman team did a fantastic job during the quarter. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:03:13I am proud of how we work together to navigate this dynamic environment while not losing sight of our long term goals. Based on our performance so far this year, the excellent job this team has done, we are raising the midpoint of both of our full year 2025 net sales and our full year 2025 adjusted EBITDA guidance. We now expect our full year 2025 net sales to be between $1,535,000,000 to $1,575,000,000 with a midpoint of 1,555,000,000.000 The low end of our net sales guidance represents 4% growth over 2024. And the high end of our guidance represents 7% growth over 2024. As for our bottom line, we now expect our full year 2025 adjusted EBITDA to be between $265,000,000 to $275,000,000 with a midpoint of $270,000,000 The low end of our 2025 adjusted EBITDA guidance represents 10 growth over 2024, And the high end of our guidance represents 14% growth over last year. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:04:18Let me spend one minute on how we're thinking about 2026 based on what we know today. We expect full year 2026 net sales to grow in the high single to low double digits and adjusted EBITDA to grow in the low to mid single digits, both in an environment where we are assuming market volumes are flat. Rollover price in our typical new business wins will drive our top line in 2026. Considering the tariff comp next year, we will remain focused on managing margins, operating efficiently and controlling costs. Rocky will share more details on our guidance and outlook for the remainder of the year in a bit. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:05:01Hillman has a long track record of performing through all kinds of economic environments since we were founded over sixty years ago. Historically, our consistent growth and solid performance has been driven by our competitive moat, steady demand for our products tied to everyday repair and maintenance projects, and great long term relationships with our customers. Hillman's value added moat, which consists of over 1,200 sales and service reps in our customer stores, direct to store delivery capability, category management and deeply integrated retail partnerships unlike any company in our space. Today, we are successfully managing the current tariff environment while not losing sight of taking great care of our customers, winning new business, and consistently striving to make our operations more efficient. We continue to deliver orders on time and in full to our customers, which has been demonstrated by our excellent fill rates for the first half of the year. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:05:58From a supply chain and operations standpoint, we continue to execute our dual faucet strategy. We've made progress reducing our exposure to suppliers based in China, where we are confident that we can end 2025 with the ability to source approximately 20% of our products from China. This compares to 2018 when we sourced nearly 50% of our products from China. The dual faucet strategy is the concept of buying product not only from multiple suppliers, which has always been our strategy, but from multiple suppliers in multiple countries. We know tariffs can change the market quickly. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:06:37We are prepared for this and have built a flexible supply chain that allows us to deliver quality products at the best overall value for our customers. We are confidently navigating the tariff situation and executing our plan to set Hillman up for long term success with our customers and long term growth. Now let's turn our results to our results for the second quarter. Net sales in the 2025 totaled $402,800,000 which increased 6.2% versus the second quarter of last year. Driving our top line growth was a four point increase from Intex, which we acquired in 2024, two points from new business wins and two points from price. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:07:21These were partially offset by a two point headwind from market volumes. For the quarter, adjusted EBITDA increased 10.1% to $75,200,000 compared to $68,400,000 last year. Adjusted EBITDA margins improved by 70 basis points to 18.7%. Adjusted gross margins for the quarter totaled 48.3%, which were down slightly from 48.7% during the year ago quarter, but improved sequentially from 46.9% for the 2025. Driving our sequential margin performance for the quarter was improved margins in RDS and a modest amount of tariff related price. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:08:05Our biggest segment, hardware and protective solutions, or HPS, had a great quarter with 8.7 growth versus the comparable period. Adjusted EBITDA increased by 14.7% to $51,500,000 Our results were driven by contributions from Intech's acquisition, new business wins and price, offset by just 1% decline in HPS market volume. Net sales in robotics and digital solutions or RDS were up 2.3% versus the year ago quarter. This is our second consecutive quarter of growth for RDS, which confirms our MiniKey 3.5 strategy is working. Adjusted gross margins and adjusted EBITDA margins both improved sequentially, totaling 73.1 percent and 32 percent respectively. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:08:59As of today, we have over 2,200 minutei key 3.5 machines in the field. We remain on track to finalize the rollout of these kiosks to our two largest customers by the 2026. Now turning to Canada. Net sales in our Canadian business were down 5.6% compared to the prior year quarter. Sales volumes and adjusted EBITDA improved sequentially as we moved from winter into the spring selling season. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:09:27Market volumes improved but remained soft and FX headwinds weighed on our Canada's results. For the second half of the year, we expect Canada to return to top line growth. And for the full year, we continue to expect that adjusted EBITDA margins will remain above 10% in Canada. Overall, Hillman is in a great position with our customers and will continue to successfully execute in this environment. With that, let me turn it over to Rocky to talk financials and guidance. Rocky? Thanks, JMA. Robert KraftCFO at Hillman Solutions00:09:58Let me dive right into our results and then I'll get to our guidance. Net sales in the 2025 totaled $402,800,000 an increase of 6.2% versus the prior year quarter. Second quarter adjusted gross margins decreased by 40 basis points to 48.3% versus the prior year quarter, but improved 140 basis points sequentially. The Intex acquisition we made in August 2024 has gross margins below our fleet. This drove the step down in margins versus last year. Robert KraftCFO at Hillman Solutions00:10:34Additionally, we saw a modest amount of tariff related price during the quarter, which helped our margins improve sequentially while entering into our busier spring selling season where we leverage more of our fixed costs. Adjusted SG and A as a percentage of sales decreased to 29.7% during the quarter from 30.7% from the year ago quarter. Adjusted EBITDA in the second quarter totaled 75,200,000.0 improving 10% versus the year ago quarter. Our adjusted EBITDA to net sales margin during the quarter improved by 70 basis points to 18.7% from a year ago. Let me now turn to cash flows. Robert KraftCFO at Hillman Solutions00:11:16For the quarter, net cash provided by operating activities was $48,700,000 and we generated $31,200,000 of free cash flow, even with a $32,500,000 cash headwind from tariffs. Turning to leverage and liquidity, we ended the 2025 with 674,700,000 of total net debt outstanding, which decreased by $29,000,000 from the end of the first quarter. Liquidity available totaled $246,900,000 consisting of $212,700,000 of availability on our credit facility and $34,200,000 of cash and equivalents. At quarter end, our net debt to trailing twelve month adjusted EBITDA ratio improved to 2.7 times versus 2.9 times a quarter ago and 2.8 times at the 2024. We maintain that our long term adjusted EBITDA to net debt leverage ratio target remains at or below 2.5 times. Robert KraftCFO at Hillman Solutions00:12:22This will give us the flexibility to grow via M and A and use our improved financial strength to play offense. Last week, our board approved a $100,000,000 share repurchase program. This is the first time Hillman has had an SRP in place since coming public in 2021. We are comfortable with our leverage ratio and feel it prudent to have an active plan in place. We intend to buy stock back to offset dilution resulting from employee stock awards. Robert KraftCFO at Hillman Solutions00:12:51Doing so will have a minimal impact on our leverage. We will also seek to buy stock back when we believe there is a disconnect between the value of our company and the value of where the stock is trading. We anticipate deploying between 20,000,000 and $25,000,000 annually, depending on the market. We believe these repurchases will be accretive to earnings per share, drive shareholder value, and will be an attractive place to invest capital. Similar to the SRP, our board also approved a shelf registration statement. Robert KraftCFO at Hillman Solutions00:13:26Similar to the SRP, we felt it's good public company governance to have a shelf on file. To be clear, we do not intend to use this shelf to raise capital of any kind in the foreseeable future. We are simply putting the mechanism in place now. Now let me turn to our guidance. While Hillman's business is generally resilient because of the demand for our products used for repair and maintenance projects around the home, we are not immune to declining foot traffic at our retail partners and a consumer watching their spending. Robert KraftCFO at Hillman Solutions00:13:59Our top and bottom line guides contemplate a volume decline, which we believe is a prudent outlook for the year considering existing home sales are projected to remain flat. On our last call, we told you that our guidance was conservative and our volumes would be better than our guide. So far, that's proven to be the case. Now we have more clarity on how tariffs will impact our business and there is less uncertainty around our expectations for the year. As such, we have increased the low end of our net sales guidance by $40,000,000. Robert KraftCFO at Hillman Solutions00:14:33This raises the midpoint as the top end remains unchanged. Our updated net sales guidance is now between 1,535,000,000.000 to $1,575,000,000 with a midpoint of $1,555,000,000 reflecting 5.6% growth over last year and a 20,000,000 increase from our previous guide. We are also increasing the low end of our adjusted EBITDA guidance by $10,000,000 This raises the midpoint as the top end remains unchanged. Our updated adjusted EBITDA guidance is now between $2.65 and $275,000,000, with a midpoint of $270,000,000 reflecting 11.7% growth over last year and a $5,000,000 increase from our previous guide. In addition, we calculate the annualized run rate for tariffs to be approximately $150,000,000 The team has done a great job working with our customers to get price. Robert KraftCFO at Hillman Solutions00:15:34We are confident we will end the year around 2.4 times leverage, assuming we hit the midpoint of our guidance, even after deploying some cash to execute a modest share repurchase. Before I turn it back to JMA, I wanted to thank the Hillman team who has worked extremely hard to deliver such a strong quarter with healthy growth on both the top and bottom line. As we look ahead, we are confident in our ability to carry this momentum forward with disciplined execution and a focus on our strategic priorities. We are well positioned to build on this foundation and expect to see sustained growth throughout the remainder of the year while we focus on growing with our customers and driving shareholder value. JMae, back to you. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:16:19Thanks, Rocky. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:16:21As Rocky said, the team has done a great job this year. I am confident Hillman is positioned for long term success and long term growth. To our 1,200 plus frontline sales and service folks, our operations team, product team and all the support functions across the organization, I am so proud of how the entire Hillman team continues to execute and win. I'd also like to extend my appreciation to our customers, vendors, partners and shareholders for their ongoing trust and support. We're proud of the growth we delivered this quarter and remain confident in our ability to execute and build on the momentum throughout the year and beyond. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:17:00With that, I'll turn it back to Wanda for the Q and A portion of our call. Wanda, please open the call for questions. Operator00:17:08Thank Our first question comes from the line of Lee Jagoda with CJS Securities. Your line is open. Lee JagodaSenior Managing Director at CJS Securities00:17:32Hi, good morning. Robert KraftCFO at Hillman Solutions00:17:33Good morning, Lee. Lee JagodaSenior Managing Director at CJS Securities00:17:35Just two questions. One, kind of bigger picture and one more numbers related. Just on the bigger picture stuff, in the recent past, you've talked about focusing a little more on the pro channel. And I'd love to understand how your competitive advantages in the retail channel would translate to the pro channel and kind of give you the right to win? Any examples of recent success would be great. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:18:02Lee, thanks. I'll take that one. So, the pro perspective, today 25% plus of our business is pro related. So, to me, especially in areas like fasteners, we have the permission to play. We have the products. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:18:15We've got brands like PowerPro, for instance, where we just launched a full range of structural products. We've got a full range of products in a number of different areas in fastening. And today those pros are using our products. We have focused in supporting our customers where they support the pro. As our customers continue to expand and we have other opportunities and channels like LBM that we're customers are serving the pro. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:18:41We're going to continue to lead in there. So we're very excited about the I'll say the opportunity as we go forward. At this point, we've got success in the fact that that area continues to grow for us. I won't go into great detail on this call, but we'll have some future updates where we'll talk about some of the things we're doing in Pro and how we'll continue to lead in. So thanks for the question. Lee JagodaSenior Managing Director at CJS Securities00:19:00Sure. And then, Rocky, just one for you on numbers. Now that we have that clarity on the tariff impact, I know last quarter you were able to give us some guidance in terms of the cadence for EBITDA and how price rolls in versus when costs hit the P and L. Can you give us an update on what the back half cadence should look like? Robert KraftCFO at Hillman Solutions00:19:25Yes, Lee. Mean, as you know, it depends on the product. But given what we have from an inventory perspective, we'll start feeling the cost from tariffs late in the third quarter. That said, every product tends to be different and there are a lot of moving parts as you think about it. But that means that we'll have a we believe we'll have a very strong third quarter because most of the price, if not all will be in place. Robert KraftCFO at Hillman Solutions00:19:54We'll begin to feel the tariff cost. And then as we go into the fourth quarter, we should see tariff cost and price both fully in the run rate. The only other thing I would say, as you heard during our prepared remarks, the cash hits us right away. So it was a cash drain in the second quarter. It'll be a little bit of a cash negative in the third quarter, but we still feel really good about where we're taking the business and really, really happy with how the team has done working with our customers to, in some cases, products and other cases get price where we need to cover them. Robert KraftCFO at Hillman Solutions00:20:29We feel like we're in really good shape for the rest of the year. Lee JagodaSenior Managing Director at CJS Securities00:20:33Okay, great. I will let others hop in the queue. Thanks. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:20:36Thanks, Lee. Robert KraftCFO at Hillman Solutions00:20:37Thanks, Lee. Operator00:20:38Please stand by for our next question. Our next question comes from the line of William Carter with Stifel. Your line is open. William CarterFinancial Analyst at Stifel Financial Corp00:20:47Hey, thank you. Good morning. Question I have for next year around the guidance. You said rollover pricing and new business wins against a flat market. Does that assume is that clarity does that assume just new business wins you did this year? William CarterFinancial Analyst at Stifel Financial Corp00:21:02Or does that assume you go back to steady state next year? And on that note, business wins have kind of cooled this year. Do you have confidence that you're able to fully accelerate and get back to that lever of growth Thanks. Robert KraftCFO at Hillman Solutions00:21:16Hey, Will, there are two things I would say there. This is Rocky. First off, we still expect that we'll be at or above slightly above our 2% new business wins, which we've done for many years in a row. As we look to 2026, yeah, we have pretty good clarity around that. If you assume we do our 2% to 3%. Robert KraftCFO at Hillman Solutions00:21:36And again, to be clear, we're not giving a guide that we think the markets are flat in '26. What we're saying is if you assume the markets are flat, and if you think about our implied guide in the back half, it would suggest that volumes are down nine in the back half. It would assume that that's down 6% for the full year in 2025. That gets us to some really interesting levels. That level of being down this year, quite frankly, if you take COVID out, will be the worst market year we've seen in Hillman since 2008 or 02/2009. Robert KraftCFO at Hillman Solutions00:22:12So again, we think we're being prudent because we are putting a lot of price in market. Everybody's putting a lot of price in market. And clearly there will be some impact on volumes. But I think while not a guide, assuming markets are flat next year, I think is prudent at this point in time. I mean, it's the August. William CarterFinancial Analyst at Stifel Financial Corp00:22:33Thanks for that. Second question, you did say, correct me if I'm wrong, annualized impact is now $150,000,000 regarding tariffs. I guess as you think about that impact and we've had a lot of fluidity, things change, I guess we had some certainty at the July. Do you have kind of full visibility of that number, all the nuances? I know steel went from 25,000,000 to $50 but that's on the components. William CarterFinancial Analyst at Stifel Financial Corp00:22:57Do you have full visibility into that? And is there any fluidity or risk in your pricing, I. E. Things could change, somebody saying, hey, let's wait six weeks, etcetera? Just I'll stop there. Thanks. Robert KraftCFO at Hillman Solutions00:23:10Yeah, again, this is Rocky. I mean, as you can imagine, the 150 is a very round number. There's a ton of fluidity in that. And there's a lot of reasons, not only what the administration might do, but there's also fluidity around what volumes do in the And that clearly impacts that number. Robert KraftCFO at Hillman Solutions00:23:28And so as we think about it, we've covered our net tariff exposure. We're confident that anything that happens going forward, particularly as you start thinking about how it rolls through our inventory, will most likely not impact 'twenty five as much as it will 2026. But I have to tell you, our customers have been great. And we have spent a lot of time making sure that we work with our customers to get the right amount of tariff price. They understand that we're just covering the tariff prices. Robert KraftCFO at Hillman Solutions00:23:56If it were a tax, we're not trying to maintain our margins and they understand that. And I think that's a positive. So far, everything we've done with our customers has been executed very well. We thank our customers. And as we think about the future, if there is fluidity to your point and it changes, which it's likely to, we will be changing what our pricing is with our customers, either up or down. William CarterFinancial Analyst at Stifel Financial Corp00:24:20Thanks. I'll pass it on. Operator00:24:22Thank you. Please stand by for our next question. Our next question comes from the line of Michael Francis with William Blair. Your line is open. Michael FrancisEquity Research Associate at William Blair00:24:31Hi, guys. Nice quarter. Michael FrancisEquity Research Associate at William Blair00:24:34I wanted to go back to the back half cadence question that Lee asked. More pointedly, I think last time you mentioned you're expecting about 300 basis points of gross margin give back from tariff prices. Is that still accurate? And is there anything you can kind of do to level set us on how we should think about gross margins 3Q and 4Q? Robert KraftCFO at Hillman Solutions00:24:58Yes. I'd like to not get into specifics around gross margin. What I would tell you is the Robert KraftCFO at Hillman Solutions00:25:03300 basis point degradation was in the face of $250,000,000 of tariff price. And so, we've said that we believe that number has come down to 150. So it's a safe assumption that that impact has come down relative to how we think about the future. I think, as you think about the I would go more to kind of the rest of the year. And as we think about our EBITDA margin for the full year, I think you can probably safely assume we'll be up about 100 basis points year over year, is probably a safe way to think about it. Robert KraftCFO at Hillman Solutions00:25:39Now, to remind everyone, there's a little bit of a tariff windfall in that because of the timing of pricing. But again, we've been paying those tariffs now for forty five to ninety days, depending on the tariff. And so it is a cash drain to the company. And so rightfully so that that price has been put in place. Michael FrancisEquity Research Associate at William Blair00:26:01Okay. And then I know it doesn't seem like demand has deteriorated much, if at all. And you talked about volumes implied in the back half of 9%. So I just wanted to see what you're seeing on R and R and if that 9% number is just sort of a conservative approach to market or if there's some deterioration happening right now that you're seeing? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:26:25Yeah, right now we feel that is the right guide. So, that's why we're sticking with the We do feel like there will be some pressure in the back half of the year. But overall, we were actually pleased with what we did in Q2 as we came out and we called our sales number and actually hit it and exceeded it. So we feel good about where we're positioned. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:26:46Until price is fully right into the marketplace, it's hard to really change that view. We'll give you an update when we come back and deliver our Q3 earnings. But we feel good about where we are right now. We feel like we're being prudent, as Rocky said earlier in his prepared remarks. Michael FrancisEquity Research Associate at William Blair00:27:01Appreciate the color. I'll pass it on. Thanks. Operator00:27:07Next question comes from the line of Matthew Bouley with Barclays. Your line is open. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:27:13Good morning, everyone. Thanks for taking the questions. I guess I wanted to ask around elasticity. Just very helpful color there around the volumes down 9% in the second half. I think in Q2 here, you had price up 2% and volume down 2%. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:27:29But thinking about that 2026 up high singles to low doubles on price, I guess I just wanted to double check on the assumption that you're not expecting to have sort of an offsetting volume impact in 2026, sort of, I guess, mirroring price. So just kind of, I guess, on that and sort of help us understand the conviction around kind of minimizing that elasticity? Thank you. Robert KraftCFO at Hillman Solutions00:27:58Yeah, Matt, I think we would start by telling you that when you think about repair and maintenance, if somebody needs to fix something and we spent a lot of time talking about this on the last quarterly call, They're going to fix it. And so there's not a lot of elasticity in price for a lot of our products. Clearly, we're not going to say there's no elasticity. And so that's one of the reasons that we've guided for the market to be down in the back half. As we think about next year, again, I want to be clear that a flat market was not our guidance. Robert KraftCFO at Hillman Solutions00:28:29Our guidance for what we said our comments, because it's not really guidance just directionally around 2026 is that was that in the situation where the market is flat. Now, again, if you start to compound what our markets have done over the last several years, you have to go back many years to find levels where we would be going into 2026. If you assume that our markets are down 9% in the back half. And so I would say we have do we have a lot of conviction that the markets will be flat right now. It's August, whatever, third, fourth, fifth. Robert KraftCFO at Hillman Solutions00:29:05So your guess is as good as ours. Do we expect that markets will be down, say something like mid single digits? I think we have a of conviction that that will not be the case, that these markets will be around flat next year. Are they up a couple? Are they down a couple? Robert KraftCFO at Hillman Solutions00:29:20Hard telling and will depend upon a lot of factors that are really hard to predict when you are in the August. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:29:27Okay, got it. No, that's super helpful. Secondly, on the margin side, I guess two parter. One is if you could just clarify that short period where the tariffs on China were at 145%. I'm just curious if there's any kind of small temporary impact from that. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:29:47So if you could just clarify that. But then secondly, if I do the back of the envelope on 2026, it seems like you're suggesting maybe the EBITDA margin down about 100 basis points next year. So if you could just kind of speak to is that simply the pricing cost, the math around how that impacts the rate? Or is there anything else that's kind of impacting that EBITDA margin in 2026? Thank you. Robert KraftCFO at Hillman Solutions00:30:14Let me try to do that in two pieces. So first on your first question, I think we paid the 145,000,000 And honestly, I'm looking at my team right now for about two weeks. So it's not material to anything that we would be disclosing or talking about. As you think about the rate, the ballpark, you're in the ballpark around what we think about rate for next year. Again, during the third quarter of this year, there will be a bit of timing around a windfall around tariffs. Robert KraftCFO at Hillman Solutions00:30:41That said, we will hang on to full price as we think about going into the fourth quarter and into next year, pending the fluidity that we answered in an earlier question. And so, again, having to laugh that, I'll call it slight period of windfall and tariffs is what is what's driving the lack of leverage between the top line and the EBITDA rate. But again, the one thing I would say, JMA, you may want to comment here, but we're running this business, I think better than we ever have. And I've been here for seven or eight years. And so, as the numbers move around, we're highly confident that we can do the right things to create the right type of profitability in this business in any environment. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:19Rocky is right. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:20I mean, we've set up the global supply chain, which just in our prepared remarks. And I think you guys have seen what we've done over the last several quarters and actually a couple of years where we've built more resiliency in their supply chain. We've improved our cost position and now we actually have multiple countries of origin, you know, to be able to diversify our supply base. So we feel like our input costs are in good shape. We're running our business from a freight perspective, pleased with where we are there. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:45Obviously, everybody's dealing with some level of inflation, which we're managing, and we're going to continue to manage the business as we go forward. So we do feel like we're positioned well to deal with the back half and into 2026. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:31:56All right. Well, thanks, guys. Good luck. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:57You're welcome. Thanks, Matt. Operator00:32:00Our next question comes from the line of Brian McNamara with Canaccord. Your line is open. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:32:08Thanks, guys. Thanks for taking the question. Good morning, and I've been working So with strong first on pricing. We haven't seen much pricing on the shelves based on our work, and I'm curious when you would expect that to hit the shelves retailer level, understanding that obviously each retailer will do things differently? And then secondly, for Rocky maybe, I know in May you called out for H2 pricing of plus 17% offset by similar volume decline. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:32:34And I think you mentioned in one of the answers to the questions that H2 guide calls for 9% volume declines, and I don't think I heard what's built in for H2 pricing component. Robert KraftCFO at Hillman Solutions00:32:44Yes. Maybe let me go first, J. M. And then you cannot answer Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:32:50So, you for answering my question. Robert KraftCFO at Hillman Solutions00:32:52Yeah, the guide would assume that in the second half, we have about 6.5% total price in the business. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:33:01Okay. And then Jay, you want add to that? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:33:04Brian, you guys do quite a bit of work, we appreciate your focus on our company and the work that you do at the shelf. Mean, there's price has been going into the marketplace at different times. So we're watching it like you are. Really to Rocky's point, it's not my place to be commenting on what our retailers will do in the back half of the year. So I think we'll have to stay posted for what we see. Robert KraftCFO at Hillman Solutions00:33:25Yeah. Hey, Brian, just to clarify, when I said 6.5 price, that's full year price, not the second half. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:33:32Understood. Okay. And then secondly, looking, existing home sales appear to be hopefully bumping along the bottom here on 4,000,000 units. What where does that number need to go for you to see a material impact on your business and market volumes overall? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:33:47It's a great question. We feel like we believe getting back to a $5,000,000 number is where we would like to see it in the future. We don't have it perfectly correlated to what that growth would be, if that's your follow on question. But we feel like a $4,500,000.05000000 unit number is more in line with where we'd expect the business to be and see some of our categories that have been negatively impacted by the decline in existing home sales improved. So that's we're hoping for as we go forward. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:34:14But also in our guide, know where the business is today and we feel confident with it running at 4,000,000 ish for what we talked about in 2025. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:34:24Got it. Thanks, guys. I'll pass it on. Robert KraftCFO at Hillman Solutions00:34:25Thanks, Brian. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:34:26Thank you. Operator00:34:28Our next question comes from the line of David Manthey with Baird. Your line is open. David MantheySenior Research Analyst at Robert W. Baird & Co00:34:34Thank you. Good morning, guys. First question is on the change in tariff expectations. So you went to a $37,500,000 per quarter run rate assumption and you were at $52,500,000 previously. So in the second half, that would be like $50,000,000 upside. David MantheySenior Research Analyst at Robert W. Baird & Co00:34:55I think you said you raised the guidance by 40 Is that just reflective of the tariffs kind of rolling in through the third quarter? Robert KraftCFO at Hillman Solutions00:35:04Yeah, the only thing I would say about the math that you just did, Dave, is remember, it's not going to the tariff cost isn't going to hit us till late in the third quarter. It's going to begin hitting us. So I think your run rate numbers are right. But again, it's just a period of time where we have a price and not tariff cost. It's not like a whole quarter or a big period of time. Robert KraftCFO at Hillman Solutions00:35:26Not sure if that answers your question. But again, remember that tariff cost isn't going to start hitting us until well into the third quarter. David MantheySenior Research Analyst at Robert W. Baird & Co00:35:36I assumed it was a timing issue. And then to the previous question on shelf prices, and you talked about prices to your customers. Is there a disconnect between those things? Are you able to go and raise price to the retailer and then they don't change shelf price for a time? Or are those more in lockstep? David MantheySenior Research Analyst at Robert W. Baird & Co00:35:57And then I guess if all goes well, based on the timing you just discussed, do you expect to be ahead of tariffs in the third quarter, meaning you'll over earn? I think you've kind of implied that. But then you'll hit sort of price cost neutrality as the tariffs fully flow in and the price changes fully flow in. But by the time you get to the 2025, those will be matched up as well as you can based on what you know currently about tariff pricing? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:36:27Yeah, so Dave, the last question that you asked there, that is accurate. That's the way to look at the benefit in Q3 and then we're at parity, if you will, or alignment in Q4. So, that's the right way to think about it. As far as pricing and retailers, I mean, retailer is going to be different depending on their accounting and how they operate. So in fairness, I don't think it's my place to comment on how and when you'll see that the pricing at the shelf. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:36:51But we partner with our customers. They are fair and balanced and not easy conversations for any of the companies or our sales teams that are having the conversations with our customers. But we're aligned with them and we're working with them to either deal with price or mitigate cost through country of origin changes. So that's how we're running the business. So that's about as far as I can go. David MantheySenior Research Analyst at Robert W. Baird & Co00:37:12Very good. Thank you. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:37:14Thanks. Robert KraftCFO at Hillman Solutions00:37:14Thank you. Take care. Operator00:37:17Our next question comes from the line of Ruben Gardner with Benchmark. Your line is open. Reuben GarnerManaging Director at The Benchmark Company LLC00:37:23Thank you. Good morning, guys. Congrats on the strong results and outlook. I guess, let's see. I had some technical difficulties, so sorry if I repeat any questions. Reuben GarnerManaging Director at The Benchmark Company LLC00:37:35But on so the pricing and volume outlook for the back half, is it right to assume that the pricing is probably more like in the low teens within the hardware section and that's where you're implying you're going to see most of the excuse me, hardware and protective section and that's where you're going to see most of the declines in volume or at least that's what you're implying? And then can you tell us when the pricing actually went into place and what you've seen from a volume standpoint since then? Robert KraftCFO at Hillman Solutions00:38:10Yes, let me take the first part and I'll let JMA take the second part, Ruben. Yes, I mean, there is more pricing in HPS than there would be in, as an example, RDS or Canada. And that reason is because there are more tariff direct impact on those businesses. And then I'll start, JMA. But the pricing, some is in place, some is going in place, some went Reuben GarnerManaging Director at The Benchmark Company LLC00:38:33in place last week, some Robert KraftCFO at Hillman Solutions00:38:34is going in place as we speak. But basically, every customer, every product is different. And so we deal with it on a case by case basis. But as we sit today, we're confident that we have our tariff exposure covered. I don't have anything to add. Thanks, Rocky. Reuben GarnerManaging Director at The Benchmark Company LLC00:38:53Got it. And then I know you've been working on mitigation efforts. Can you give any update or details there? Still on track to get it down, at least get China down to 20%. What kind of markets are you taking it to? Reuben GarnerManaging Director at The Benchmark Company LLC00:39:07And what are the tariff implications in those markets based on what you know today? I know it's fluid, but. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:39:15Yeah, it's fluid. I'll give you a couple of nuggets, Ruben. From our perspective, we feel like we're in very good shape with our movement of product out of China and our dual faucet strategy. So we do still have we have confidence that we have the ability to be approximately 20% out of China by year end. We are moving it to pick a name of the country. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:39:35I mean, these are not in volume order, but places like Thailand, Vietnam, India are a few that would benefit from the moves that we're making right now. Our product and our operation teams are doing a great job. Our sourcing team is doing a great job working with those suppliers. We've had opportunities that we've been developing over the last several years that now we're going to start moving volume to. We have other new opportunities that we'll be moving to. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:39:59It is fluid like you said, as things settle down and we see where the best place for us to have the most competitive product for our customers and the best value and the right quality is what will end up making a determination of where we'll round out. So Ruben, we'll have a lot to update you and everyone else on in future quarters. But it is fluid and I'm actually really proud of what the team's doing and the partnership with our customers to make sure that we can take care of our customers and ultimately our end users. A lot of moving pieces. Reuben GarnerManaging Director at The Benchmark Company LLC00:40:31Great. Thanks, guys. Good luck. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:40:33Welcome. Thanks a lot. Operator00:40:34Thank you. Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Mr. Al Dinolfi for closing remarks. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:40:44Thank you, everyone, for joining us this morning. We look forward to updating you on our progress soon. Hope everybody has a great day. Take care. Operator disconnect. Operator00:40:55Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.Read moreParticipantsExecutivesMichael KoehlerVP of Investor Relations & TreasuryJon Michael AdinolfiDirector, President & CEORobert KraftCFOAnalystsLee JagodaSenior Managing Director at CJS SecuritiesWilliam CarterFinancial Analyst at Stifel Financial CorpMichael FrancisEquity Research Associate at William BlairMatthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at BarclaysBrian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital MarketsDavid MantheySenior Research Analyst at Robert W. Baird & CoReuben GarnerManaging Director at The Benchmark Company LLCPowered by Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Hillman Solutions Earnings HeadlinesHillman Solutions Corp. (NASDAQ:HLMN) Receives Consensus Rating of "Moderate Buy" from AnalystsAugust 21 at 3:25 AM | americanbankingnews.comHillman Solutions Corp. Earnings Call Highlights Strong Q2 PerformanceAugust 16, 2025 | theglobeandmail.comThe Coin That Could Define Trump’s Crypto PresidencyWhen Trump returned to office, one of his first moves was to tap PayPal’s former COO, David Sacks, as a top advisor on crypto and AI. That alone signaled a shift. But insiders close to D.C. aren’t just talking crypto policy—they’re quietly buying something most retail investors have missed. While the crowd chases Bitcoin to $150,000, Weiss Ratings expert Juan Villaverde believes a different coin—already backed by giants like Google, Visa, and PayPal—could soon become crypto’s “Third Giant.” | Weiss Ratings (Ad)The Top 5 Analyst Questions From Hillman’s Q2 Earnings CallAugust 13, 2025 | msn.comHLMN Q2 Deep Dive: Tariff Mitigation and Supply Chain Flexibility Fuel OutlookAugust 13, 2025 | finance.yahoo.comHillman Solutions (NASDAQ:HLMN) Upgraded to Buy at Wall Street ZenAugust 12, 2025 | americanbankingnews.comSee More Hillman Solutions Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Hillman Solutions? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Hillman Solutions and other key companies, straight to your email. Email Address About Hillman SolutionsFounded in 1964 and headquartered in Cincinnati, Ohio, Hillman is a leading North American provider of complete hardware solutions, delivered with industry best customer service to over 40,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & Industrial customers. Leveraging a world-class distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency.View Hillman Solutions ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles After Earnings Miss, Walmart Is Still a Top Consumer Staples PlayRoyal Caribbean Earnings Beat Fuels Strong 2025 OutlookDLocal Stock Soars 43% After Earnings Beat and Raised GuidanceGreen Dot's 30% Rally: Turnaround Takes Off on Explosive EarningsElbit Systems Jumps on Record Earnings and a $1.6B ContractBrinker Serves Up Earnings Beat, Sidesteps Cost PressuresWhy BigBear.ai Stock's Dip on Earnings Can Be an Opportunity Upcoming Earnings PDD (8/25/2025)BHP Group (8/25/2025)Bank Of Montreal (8/26/2025)Bank of Nova Scotia (8/26/2025)CrowdStrike (8/27/2025)NVIDIA (8/27/2025)Royal Bank Of Canada (8/27/2025)Snowflake (8/27/2025)Autodesk (8/28/2025)Marvell Technology (8/28/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
PresentationSkip to Participants Operator00:00:00Good morning, and welcome to the Second Quarter twenty twenty five Results Presentation for Hillman Solutions Corp. My name is Towanda, and I will be your conference call operator today. Before we begin, I would like to remind our listeners that today's presentation is being recorded and simultaneously webcast. The company's earnings release presentation and 10 Q were issued this morning. These documents and a replay of today's presentation can be accessed on the Hillman's Investor Relations website at ir.hillmangroup.com. Operator00:00:34I would now like to turn the call over to Michael Koehler with Hillman. Michael KoehlerVP of Investor Relations & Treasury at Hillman Solutions00:00:39Thank you, Tawanda. Good morning, everyone, and thank you for joining us. I'm Michael Kahler, Vice President of Investor Relations and Treasury. Joining me on today's call are Hillman's President and Chief Executive Officer, John Michael Adinolfi, or JMA as we call him, and Hillman's Chief Financial Officer, Rocky Kraft. Before we get into today's call, I would like to remind our audience that certain statements made today may be considered forward looking and are subject to the Safe Harbor provisions of applicable securities laws. Michael KoehlerVP of Investor Relations & Treasury at Hillman Solutions00:01:05These forward looking statements are not guarantees of future performance and are subject to certain risks, uncertainties, assumptions and other factors, many of which are beyond the company's control and may cause actual results to differ materially from those projected in such statements. Some of those factors that could influence our results are contained in our periodic and annual reports filed with the SEC. For more information regarding these risks and uncertainties, please see slide two in our earnings call slide presentation, which is available on our website, ir.hillmangroup.com. In addition, on today's call, we will refer to certain non GAAP financial measures. Information regarding our use of and reconciliations of these measures to our GAAP results are available in our earnings call slide presentation. Michael KoehlerVP of Investor Relations & Treasury at Hillman Solutions00:01:50JMA will begin today's call by providing some commentary on our strong second quarter results and then give an update on our guidance. Following JMA's comments, Rocky will give a more detailed walk through our financials and guidance before turning the call back over to JMA for some closing comments. Then we will open the call up for your questions. It's now my pleasure to turn the call over to our President and CEO, John Michael Adonolfi. JMA? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:02:14Thanks, Michael. Good morning, everyone, and thank you for joining us. We executed well and took great care of our customers during the 2025, driving strong results on both the top and bottom line. We are pleased with our results for the first half of the year and are positioned well for continued top and bottom line growth in the second half of the year. Let me take a moment to provide an update on some topics we discussed last quarter. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:02:40We told you that our business is well positioned to operate in any environment, and we delivered solid results during both quarters this year. We told you that we would cover tariff related cost increases, and we have. We told you that the resilience of Hillman's business should prove volumes to be better than our guide, and they were. We told you that we would optimize the country of origin where we source our products with our dual faucet strategy, and we have. The Hillman team did a fantastic job during the quarter. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:03:13I am proud of how we work together to navigate this dynamic environment while not losing sight of our long term goals. Based on our performance so far this year, the excellent job this team has done, we are raising the midpoint of both of our full year 2025 net sales and our full year 2025 adjusted EBITDA guidance. We now expect our full year 2025 net sales to be between $1,535,000,000 to $1,575,000,000 with a midpoint of 1,555,000,000.000 The low end of our net sales guidance represents 4% growth over 2024. And the high end of our guidance represents 7% growth over 2024. As for our bottom line, we now expect our full year 2025 adjusted EBITDA to be between $265,000,000 to $275,000,000 with a midpoint of $270,000,000 The low end of our 2025 adjusted EBITDA guidance represents 10 growth over 2024, And the high end of our guidance represents 14% growth over last year. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:04:18Let me spend one minute on how we're thinking about 2026 based on what we know today. We expect full year 2026 net sales to grow in the high single to low double digits and adjusted EBITDA to grow in the low to mid single digits, both in an environment where we are assuming market volumes are flat. Rollover price in our typical new business wins will drive our top line in 2026. Considering the tariff comp next year, we will remain focused on managing margins, operating efficiently and controlling costs. Rocky will share more details on our guidance and outlook for the remainder of the year in a bit. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:05:01Hillman has a long track record of performing through all kinds of economic environments since we were founded over sixty years ago. Historically, our consistent growth and solid performance has been driven by our competitive moat, steady demand for our products tied to everyday repair and maintenance projects, and great long term relationships with our customers. Hillman's value added moat, which consists of over 1,200 sales and service reps in our customer stores, direct to store delivery capability, category management and deeply integrated retail partnerships unlike any company in our space. Today, we are successfully managing the current tariff environment while not losing sight of taking great care of our customers, winning new business, and consistently striving to make our operations more efficient. We continue to deliver orders on time and in full to our customers, which has been demonstrated by our excellent fill rates for the first half of the year. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:05:58From a supply chain and operations standpoint, we continue to execute our dual faucet strategy. We've made progress reducing our exposure to suppliers based in China, where we are confident that we can end 2025 with the ability to source approximately 20% of our products from China. This compares to 2018 when we sourced nearly 50% of our products from China. The dual faucet strategy is the concept of buying product not only from multiple suppliers, which has always been our strategy, but from multiple suppliers in multiple countries. We know tariffs can change the market quickly. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:06:37We are prepared for this and have built a flexible supply chain that allows us to deliver quality products at the best overall value for our customers. We are confidently navigating the tariff situation and executing our plan to set Hillman up for long term success with our customers and long term growth. Now let's turn our results to our results for the second quarter. Net sales in the 2025 totaled $402,800,000 which increased 6.2% versus the second quarter of last year. Driving our top line growth was a four point increase from Intex, which we acquired in 2024, two points from new business wins and two points from price. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:07:21These were partially offset by a two point headwind from market volumes. For the quarter, adjusted EBITDA increased 10.1% to $75,200,000 compared to $68,400,000 last year. Adjusted EBITDA margins improved by 70 basis points to 18.7%. Adjusted gross margins for the quarter totaled 48.3%, which were down slightly from 48.7% during the year ago quarter, but improved sequentially from 46.9% for the 2025. Driving our sequential margin performance for the quarter was improved margins in RDS and a modest amount of tariff related price. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:08:05Our biggest segment, hardware and protective solutions, or HPS, had a great quarter with 8.7 growth versus the comparable period. Adjusted EBITDA increased by 14.7% to $51,500,000 Our results were driven by contributions from Intech's acquisition, new business wins and price, offset by just 1% decline in HPS market volume. Net sales in robotics and digital solutions or RDS were up 2.3% versus the year ago quarter. This is our second consecutive quarter of growth for RDS, which confirms our MiniKey 3.5 strategy is working. Adjusted gross margins and adjusted EBITDA margins both improved sequentially, totaling 73.1 percent and 32 percent respectively. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:08:59As of today, we have over 2,200 minutei key 3.5 machines in the field. We remain on track to finalize the rollout of these kiosks to our two largest customers by the 2026. Now turning to Canada. Net sales in our Canadian business were down 5.6% compared to the prior year quarter. Sales volumes and adjusted EBITDA improved sequentially as we moved from winter into the spring selling season. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:09:27Market volumes improved but remained soft and FX headwinds weighed on our Canada's results. For the second half of the year, we expect Canada to return to top line growth. And for the full year, we continue to expect that adjusted EBITDA margins will remain above 10% in Canada. Overall, Hillman is in a great position with our customers and will continue to successfully execute in this environment. With that, let me turn it over to Rocky to talk financials and guidance. Rocky? Thanks, JMA. Robert KraftCFO at Hillman Solutions00:09:58Let me dive right into our results and then I'll get to our guidance. Net sales in the 2025 totaled $402,800,000 an increase of 6.2% versus the prior year quarter. Second quarter adjusted gross margins decreased by 40 basis points to 48.3% versus the prior year quarter, but improved 140 basis points sequentially. The Intex acquisition we made in August 2024 has gross margins below our fleet. This drove the step down in margins versus last year. Robert KraftCFO at Hillman Solutions00:10:34Additionally, we saw a modest amount of tariff related price during the quarter, which helped our margins improve sequentially while entering into our busier spring selling season where we leverage more of our fixed costs. Adjusted SG and A as a percentage of sales decreased to 29.7% during the quarter from 30.7% from the year ago quarter. Adjusted EBITDA in the second quarter totaled 75,200,000.0 improving 10% versus the year ago quarter. Our adjusted EBITDA to net sales margin during the quarter improved by 70 basis points to 18.7% from a year ago. Let me now turn to cash flows. Robert KraftCFO at Hillman Solutions00:11:16For the quarter, net cash provided by operating activities was $48,700,000 and we generated $31,200,000 of free cash flow, even with a $32,500,000 cash headwind from tariffs. Turning to leverage and liquidity, we ended the 2025 with 674,700,000 of total net debt outstanding, which decreased by $29,000,000 from the end of the first quarter. Liquidity available totaled $246,900,000 consisting of $212,700,000 of availability on our credit facility and $34,200,000 of cash and equivalents. At quarter end, our net debt to trailing twelve month adjusted EBITDA ratio improved to 2.7 times versus 2.9 times a quarter ago and 2.8 times at the 2024. We maintain that our long term adjusted EBITDA to net debt leverage ratio target remains at or below 2.5 times. Robert KraftCFO at Hillman Solutions00:12:22This will give us the flexibility to grow via M and A and use our improved financial strength to play offense. Last week, our board approved a $100,000,000 share repurchase program. This is the first time Hillman has had an SRP in place since coming public in 2021. We are comfortable with our leverage ratio and feel it prudent to have an active plan in place. We intend to buy stock back to offset dilution resulting from employee stock awards. Robert KraftCFO at Hillman Solutions00:12:51Doing so will have a minimal impact on our leverage. We will also seek to buy stock back when we believe there is a disconnect between the value of our company and the value of where the stock is trading. We anticipate deploying between 20,000,000 and $25,000,000 annually, depending on the market. We believe these repurchases will be accretive to earnings per share, drive shareholder value, and will be an attractive place to invest capital. Similar to the SRP, our board also approved a shelf registration statement. Robert KraftCFO at Hillman Solutions00:13:26Similar to the SRP, we felt it's good public company governance to have a shelf on file. To be clear, we do not intend to use this shelf to raise capital of any kind in the foreseeable future. We are simply putting the mechanism in place now. Now let me turn to our guidance. While Hillman's business is generally resilient because of the demand for our products used for repair and maintenance projects around the home, we are not immune to declining foot traffic at our retail partners and a consumer watching their spending. Robert KraftCFO at Hillman Solutions00:13:59Our top and bottom line guides contemplate a volume decline, which we believe is a prudent outlook for the year considering existing home sales are projected to remain flat. On our last call, we told you that our guidance was conservative and our volumes would be better than our guide. So far, that's proven to be the case. Now we have more clarity on how tariffs will impact our business and there is less uncertainty around our expectations for the year. As such, we have increased the low end of our net sales guidance by $40,000,000. Robert KraftCFO at Hillman Solutions00:14:33This raises the midpoint as the top end remains unchanged. Our updated net sales guidance is now between 1,535,000,000.000 to $1,575,000,000 with a midpoint of $1,555,000,000 reflecting 5.6% growth over last year and a 20,000,000 increase from our previous guide. We are also increasing the low end of our adjusted EBITDA guidance by $10,000,000 This raises the midpoint as the top end remains unchanged. Our updated adjusted EBITDA guidance is now between $2.65 and $275,000,000, with a midpoint of $270,000,000 reflecting 11.7% growth over last year and a $5,000,000 increase from our previous guide. In addition, we calculate the annualized run rate for tariffs to be approximately $150,000,000 The team has done a great job working with our customers to get price. Robert KraftCFO at Hillman Solutions00:15:34We are confident we will end the year around 2.4 times leverage, assuming we hit the midpoint of our guidance, even after deploying some cash to execute a modest share repurchase. Before I turn it back to JMA, I wanted to thank the Hillman team who has worked extremely hard to deliver such a strong quarter with healthy growth on both the top and bottom line. As we look ahead, we are confident in our ability to carry this momentum forward with disciplined execution and a focus on our strategic priorities. We are well positioned to build on this foundation and expect to see sustained growth throughout the remainder of the year while we focus on growing with our customers and driving shareholder value. JMae, back to you. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:16:19Thanks, Rocky. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:16:21As Rocky said, the team has done a great job this year. I am confident Hillman is positioned for long term success and long term growth. To our 1,200 plus frontline sales and service folks, our operations team, product team and all the support functions across the organization, I am so proud of how the entire Hillman team continues to execute and win. I'd also like to extend my appreciation to our customers, vendors, partners and shareholders for their ongoing trust and support. We're proud of the growth we delivered this quarter and remain confident in our ability to execute and build on the momentum throughout the year and beyond. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:17:00With that, I'll turn it back to Wanda for the Q and A portion of our call. Wanda, please open the call for questions. Operator00:17:08Thank Our first question comes from the line of Lee Jagoda with CJS Securities. Your line is open. Lee JagodaSenior Managing Director at CJS Securities00:17:32Hi, good morning. Robert KraftCFO at Hillman Solutions00:17:33Good morning, Lee. Lee JagodaSenior Managing Director at CJS Securities00:17:35Just two questions. One, kind of bigger picture and one more numbers related. Just on the bigger picture stuff, in the recent past, you've talked about focusing a little more on the pro channel. And I'd love to understand how your competitive advantages in the retail channel would translate to the pro channel and kind of give you the right to win? Any examples of recent success would be great. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:18:02Lee, thanks. I'll take that one. So, the pro perspective, today 25% plus of our business is pro related. So, to me, especially in areas like fasteners, we have the permission to play. We have the products. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:18:15We've got brands like PowerPro, for instance, where we just launched a full range of structural products. We've got a full range of products in a number of different areas in fastening. And today those pros are using our products. We have focused in supporting our customers where they support the pro. As our customers continue to expand and we have other opportunities and channels like LBM that we're customers are serving the pro. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:18:41We're going to continue to lead in there. So we're very excited about the I'll say the opportunity as we go forward. At this point, we've got success in the fact that that area continues to grow for us. I won't go into great detail on this call, but we'll have some future updates where we'll talk about some of the things we're doing in Pro and how we'll continue to lead in. So thanks for the question. Lee JagodaSenior Managing Director at CJS Securities00:19:00Sure. And then, Rocky, just one for you on numbers. Now that we have that clarity on the tariff impact, I know last quarter you were able to give us some guidance in terms of the cadence for EBITDA and how price rolls in versus when costs hit the P and L. Can you give us an update on what the back half cadence should look like? Robert KraftCFO at Hillman Solutions00:19:25Yes, Lee. Mean, as you know, it depends on the product. But given what we have from an inventory perspective, we'll start feeling the cost from tariffs late in the third quarter. That said, every product tends to be different and there are a lot of moving parts as you think about it. But that means that we'll have a we believe we'll have a very strong third quarter because most of the price, if not all will be in place. Robert KraftCFO at Hillman Solutions00:19:54We'll begin to feel the tariff cost. And then as we go into the fourth quarter, we should see tariff cost and price both fully in the run rate. The only other thing I would say, as you heard during our prepared remarks, the cash hits us right away. So it was a cash drain in the second quarter. It'll be a little bit of a cash negative in the third quarter, but we still feel really good about where we're taking the business and really, really happy with how the team has done working with our customers to, in some cases, products and other cases get price where we need to cover them. Robert KraftCFO at Hillman Solutions00:20:29We feel like we're in really good shape for the rest of the year. Lee JagodaSenior Managing Director at CJS Securities00:20:33Okay, great. I will let others hop in the queue. Thanks. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:20:36Thanks, Lee. Robert KraftCFO at Hillman Solutions00:20:37Thanks, Lee. Operator00:20:38Please stand by for our next question. Our next question comes from the line of William Carter with Stifel. Your line is open. William CarterFinancial Analyst at Stifel Financial Corp00:20:47Hey, thank you. Good morning. Question I have for next year around the guidance. You said rollover pricing and new business wins against a flat market. Does that assume is that clarity does that assume just new business wins you did this year? William CarterFinancial Analyst at Stifel Financial Corp00:21:02Or does that assume you go back to steady state next year? And on that note, business wins have kind of cooled this year. Do you have confidence that you're able to fully accelerate and get back to that lever of growth Thanks. Robert KraftCFO at Hillman Solutions00:21:16Hey, Will, there are two things I would say there. This is Rocky. First off, we still expect that we'll be at or above slightly above our 2% new business wins, which we've done for many years in a row. As we look to 2026, yeah, we have pretty good clarity around that. If you assume we do our 2% to 3%. Robert KraftCFO at Hillman Solutions00:21:36And again, to be clear, we're not giving a guide that we think the markets are flat in '26. What we're saying is if you assume the markets are flat, and if you think about our implied guide in the back half, it would suggest that volumes are down nine in the back half. It would assume that that's down 6% for the full year in 2025. That gets us to some really interesting levels. That level of being down this year, quite frankly, if you take COVID out, will be the worst market year we've seen in Hillman since 2008 or 02/2009. Robert KraftCFO at Hillman Solutions00:22:12So again, we think we're being prudent because we are putting a lot of price in market. Everybody's putting a lot of price in market. And clearly there will be some impact on volumes. But I think while not a guide, assuming markets are flat next year, I think is prudent at this point in time. I mean, it's the August. William CarterFinancial Analyst at Stifel Financial Corp00:22:33Thanks for that. Second question, you did say, correct me if I'm wrong, annualized impact is now $150,000,000 regarding tariffs. I guess as you think about that impact and we've had a lot of fluidity, things change, I guess we had some certainty at the July. Do you have kind of full visibility of that number, all the nuances? I know steel went from 25,000,000 to $50 but that's on the components. William CarterFinancial Analyst at Stifel Financial Corp00:22:57Do you have full visibility into that? And is there any fluidity or risk in your pricing, I. E. Things could change, somebody saying, hey, let's wait six weeks, etcetera? Just I'll stop there. Thanks. Robert KraftCFO at Hillman Solutions00:23:10Yeah, again, this is Rocky. I mean, as you can imagine, the 150 is a very round number. There's a ton of fluidity in that. And there's a lot of reasons, not only what the administration might do, but there's also fluidity around what volumes do in the And that clearly impacts that number. Robert KraftCFO at Hillman Solutions00:23:28And so as we think about it, we've covered our net tariff exposure. We're confident that anything that happens going forward, particularly as you start thinking about how it rolls through our inventory, will most likely not impact 'twenty five as much as it will 2026. But I have to tell you, our customers have been great. And we have spent a lot of time making sure that we work with our customers to get the right amount of tariff price. They understand that we're just covering the tariff prices. Robert KraftCFO at Hillman Solutions00:23:56If it were a tax, we're not trying to maintain our margins and they understand that. And I think that's a positive. So far, everything we've done with our customers has been executed very well. We thank our customers. And as we think about the future, if there is fluidity to your point and it changes, which it's likely to, we will be changing what our pricing is with our customers, either up or down. William CarterFinancial Analyst at Stifel Financial Corp00:24:20Thanks. I'll pass it on. Operator00:24:22Thank you. Please stand by for our next question. Our next question comes from the line of Michael Francis with William Blair. Your line is open. Michael FrancisEquity Research Associate at William Blair00:24:31Hi, guys. Nice quarter. Michael FrancisEquity Research Associate at William Blair00:24:34I wanted to go back to the back half cadence question that Lee asked. More pointedly, I think last time you mentioned you're expecting about 300 basis points of gross margin give back from tariff prices. Is that still accurate? And is there anything you can kind of do to level set us on how we should think about gross margins 3Q and 4Q? Robert KraftCFO at Hillman Solutions00:24:58Yes. I'd like to not get into specifics around gross margin. What I would tell you is the Robert KraftCFO at Hillman Solutions00:25:03300 basis point degradation was in the face of $250,000,000 of tariff price. And so, we've said that we believe that number has come down to 150. So it's a safe assumption that that impact has come down relative to how we think about the future. I think, as you think about the I would go more to kind of the rest of the year. And as we think about our EBITDA margin for the full year, I think you can probably safely assume we'll be up about 100 basis points year over year, is probably a safe way to think about it. Robert KraftCFO at Hillman Solutions00:25:39Now, to remind everyone, there's a little bit of a tariff windfall in that because of the timing of pricing. But again, we've been paying those tariffs now for forty five to ninety days, depending on the tariff. And so it is a cash drain to the company. And so rightfully so that that price has been put in place. Michael FrancisEquity Research Associate at William Blair00:26:01Okay. And then I know it doesn't seem like demand has deteriorated much, if at all. And you talked about volumes implied in the back half of 9%. So I just wanted to see what you're seeing on R and R and if that 9% number is just sort of a conservative approach to market or if there's some deterioration happening right now that you're seeing? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:26:25Yeah, right now we feel that is the right guide. So, that's why we're sticking with the We do feel like there will be some pressure in the back half of the year. But overall, we were actually pleased with what we did in Q2 as we came out and we called our sales number and actually hit it and exceeded it. So we feel good about where we're positioned. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:26:46Until price is fully right into the marketplace, it's hard to really change that view. We'll give you an update when we come back and deliver our Q3 earnings. But we feel good about where we are right now. We feel like we're being prudent, as Rocky said earlier in his prepared remarks. Michael FrancisEquity Research Associate at William Blair00:27:01Appreciate the color. I'll pass it on. Thanks. Operator00:27:07Next question comes from the line of Matthew Bouley with Barclays. Your line is open. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:27:13Good morning, everyone. Thanks for taking the questions. I guess I wanted to ask around elasticity. Just very helpful color there around the volumes down 9% in the second half. I think in Q2 here, you had price up 2% and volume down 2%. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:27:29But thinking about that 2026 up high singles to low doubles on price, I guess I just wanted to double check on the assumption that you're not expecting to have sort of an offsetting volume impact in 2026, sort of, I guess, mirroring price. So just kind of, I guess, on that and sort of help us understand the conviction around kind of minimizing that elasticity? Thank you. Robert KraftCFO at Hillman Solutions00:27:58Yeah, Matt, I think we would start by telling you that when you think about repair and maintenance, if somebody needs to fix something and we spent a lot of time talking about this on the last quarterly call, They're going to fix it. And so there's not a lot of elasticity in price for a lot of our products. Clearly, we're not going to say there's no elasticity. And so that's one of the reasons that we've guided for the market to be down in the back half. As we think about next year, again, I want to be clear that a flat market was not our guidance. Robert KraftCFO at Hillman Solutions00:28:29Our guidance for what we said our comments, because it's not really guidance just directionally around 2026 is that was that in the situation where the market is flat. Now, again, if you start to compound what our markets have done over the last several years, you have to go back many years to find levels where we would be going into 2026. If you assume that our markets are down 9% in the back half. And so I would say we have do we have a lot of conviction that the markets will be flat right now. It's August, whatever, third, fourth, fifth. Robert KraftCFO at Hillman Solutions00:29:05So your guess is as good as ours. Do we expect that markets will be down, say something like mid single digits? I think we have a of conviction that that will not be the case, that these markets will be around flat next year. Are they up a couple? Are they down a couple? Robert KraftCFO at Hillman Solutions00:29:20Hard telling and will depend upon a lot of factors that are really hard to predict when you are in the August. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:29:27Okay, got it. No, that's super helpful. Secondly, on the margin side, I guess two parter. One is if you could just clarify that short period where the tariffs on China were at 145%. I'm just curious if there's any kind of small temporary impact from that. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:29:47So if you could just clarify that. But then secondly, if I do the back of the envelope on 2026, it seems like you're suggesting maybe the EBITDA margin down about 100 basis points next year. So if you could just kind of speak to is that simply the pricing cost, the math around how that impacts the rate? Or is there anything else that's kind of impacting that EBITDA margin in 2026? Thank you. Robert KraftCFO at Hillman Solutions00:30:14Let me try to do that in two pieces. So first on your first question, I think we paid the 145,000,000 And honestly, I'm looking at my team right now for about two weeks. So it's not material to anything that we would be disclosing or talking about. As you think about the rate, the ballpark, you're in the ballpark around what we think about rate for next year. Again, during the third quarter of this year, there will be a bit of timing around a windfall around tariffs. Robert KraftCFO at Hillman Solutions00:30:41That said, we will hang on to full price as we think about going into the fourth quarter and into next year, pending the fluidity that we answered in an earlier question. And so, again, having to laugh that, I'll call it slight period of windfall and tariffs is what is what's driving the lack of leverage between the top line and the EBITDA rate. But again, the one thing I would say, JMA, you may want to comment here, but we're running this business, I think better than we ever have. And I've been here for seven or eight years. And so, as the numbers move around, we're highly confident that we can do the right things to create the right type of profitability in this business in any environment. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:19Rocky is right. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:20I mean, we've set up the global supply chain, which just in our prepared remarks. And I think you guys have seen what we've done over the last several quarters and actually a couple of years where we've built more resiliency in their supply chain. We've improved our cost position and now we actually have multiple countries of origin, you know, to be able to diversify our supply base. So we feel like our input costs are in good shape. We're running our business from a freight perspective, pleased with where we are there. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:45Obviously, everybody's dealing with some level of inflation, which we're managing, and we're going to continue to manage the business as we go forward. So we do feel like we're positioned well to deal with the back half and into 2026. Matthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at Barclays00:31:56All right. Well, thanks, guys. Good luck. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:31:57You're welcome. Thanks, Matt. Operator00:32:00Our next question comes from the line of Brian McNamara with Canaccord. Your line is open. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:32:08Thanks, guys. Thanks for taking the question. Good morning, and I've been working So with strong first on pricing. We haven't seen much pricing on the shelves based on our work, and I'm curious when you would expect that to hit the shelves retailer level, understanding that obviously each retailer will do things differently? And then secondly, for Rocky maybe, I know in May you called out for H2 pricing of plus 17% offset by similar volume decline. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:32:34And I think you mentioned in one of the answers to the questions that H2 guide calls for 9% volume declines, and I don't think I heard what's built in for H2 pricing component. Robert KraftCFO at Hillman Solutions00:32:44Yes. Maybe let me go first, J. M. And then you cannot answer Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:32:50So, you for answering my question. Robert KraftCFO at Hillman Solutions00:32:52Yeah, the guide would assume that in the second half, we have about 6.5% total price in the business. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:33:01Okay. And then Jay, you want add to that? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:33:04Brian, you guys do quite a bit of work, we appreciate your focus on our company and the work that you do at the shelf. Mean, there's price has been going into the marketplace at different times. So we're watching it like you are. Really to Rocky's point, it's not my place to be commenting on what our retailers will do in the back half of the year. So I think we'll have to stay posted for what we see. Robert KraftCFO at Hillman Solutions00:33:25Yeah. Hey, Brian, just to clarify, when I said 6.5 price, that's full year price, not the second half. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:33:32Understood. Okay. And then secondly, looking, existing home sales appear to be hopefully bumping along the bottom here on 4,000,000 units. What where does that number need to go for you to see a material impact on your business and market volumes overall? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:33:47It's a great question. We feel like we believe getting back to a $5,000,000 number is where we would like to see it in the future. We don't have it perfectly correlated to what that growth would be, if that's your follow on question. But we feel like a $4,500,000.05000000 unit number is more in line with where we'd expect the business to be and see some of our categories that have been negatively impacted by the decline in existing home sales improved. So that's we're hoping for as we go forward. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:34:14But also in our guide, know where the business is today and we feel confident with it running at 4,000,000 ish for what we talked about in 2025. Brian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital Markets00:34:24Got it. Thanks, guys. I'll pass it on. Robert KraftCFO at Hillman Solutions00:34:25Thanks, Brian. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:34:26Thank you. Operator00:34:28Our next question comes from the line of David Manthey with Baird. Your line is open. David MantheySenior Research Analyst at Robert W. Baird & Co00:34:34Thank you. Good morning, guys. First question is on the change in tariff expectations. So you went to a $37,500,000 per quarter run rate assumption and you were at $52,500,000 previously. So in the second half, that would be like $50,000,000 upside. David MantheySenior Research Analyst at Robert W. Baird & Co00:34:55I think you said you raised the guidance by 40 Is that just reflective of the tariffs kind of rolling in through the third quarter? Robert KraftCFO at Hillman Solutions00:35:04Yeah, the only thing I would say about the math that you just did, Dave, is remember, it's not going to the tariff cost isn't going to hit us till late in the third quarter. It's going to begin hitting us. So I think your run rate numbers are right. But again, it's just a period of time where we have a price and not tariff cost. It's not like a whole quarter or a big period of time. Robert KraftCFO at Hillman Solutions00:35:26Not sure if that answers your question. But again, remember that tariff cost isn't going to start hitting us until well into the third quarter. David MantheySenior Research Analyst at Robert W. Baird & Co00:35:36I assumed it was a timing issue. And then to the previous question on shelf prices, and you talked about prices to your customers. Is there a disconnect between those things? Are you able to go and raise price to the retailer and then they don't change shelf price for a time? Or are those more in lockstep? David MantheySenior Research Analyst at Robert W. Baird & Co00:35:57And then I guess if all goes well, based on the timing you just discussed, do you expect to be ahead of tariffs in the third quarter, meaning you'll over earn? I think you've kind of implied that. But then you'll hit sort of price cost neutrality as the tariffs fully flow in and the price changes fully flow in. But by the time you get to the 2025, those will be matched up as well as you can based on what you know currently about tariff pricing? Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:36:27Yeah, so Dave, the last question that you asked there, that is accurate. That's the way to look at the benefit in Q3 and then we're at parity, if you will, or alignment in Q4. So, that's the right way to think about it. As far as pricing and retailers, I mean, retailer is going to be different depending on their accounting and how they operate. So in fairness, I don't think it's my place to comment on how and when you'll see that the pricing at the shelf. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:36:51But we partner with our customers. They are fair and balanced and not easy conversations for any of the companies or our sales teams that are having the conversations with our customers. But we're aligned with them and we're working with them to either deal with price or mitigate cost through country of origin changes. So that's how we're running the business. So that's about as far as I can go. David MantheySenior Research Analyst at Robert W. Baird & Co00:37:12Very good. Thank you. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:37:14Thanks. Robert KraftCFO at Hillman Solutions00:37:14Thank you. Take care. Operator00:37:17Our next question comes from the line of Ruben Gardner with Benchmark. Your line is open. Reuben GarnerManaging Director at The Benchmark Company LLC00:37:23Thank you. Good morning, guys. Congrats on the strong results and outlook. I guess, let's see. I had some technical difficulties, so sorry if I repeat any questions. Reuben GarnerManaging Director at The Benchmark Company LLC00:37:35But on so the pricing and volume outlook for the back half, is it right to assume that the pricing is probably more like in the low teens within the hardware section and that's where you're implying you're going to see most of the excuse me, hardware and protective section and that's where you're going to see most of the declines in volume or at least that's what you're implying? And then can you tell us when the pricing actually went into place and what you've seen from a volume standpoint since then? Robert KraftCFO at Hillman Solutions00:38:10Yes, let me take the first part and I'll let JMA take the second part, Ruben. Yes, I mean, there is more pricing in HPS than there would be in, as an example, RDS or Canada. And that reason is because there are more tariff direct impact on those businesses. And then I'll start, JMA. But the pricing, some is in place, some is going in place, some went Reuben GarnerManaging Director at The Benchmark Company LLC00:38:33in place last week, some Robert KraftCFO at Hillman Solutions00:38:34is going in place as we speak. But basically, every customer, every product is different. And so we deal with it on a case by case basis. But as we sit today, we're confident that we have our tariff exposure covered. I don't have anything to add. Thanks, Rocky. Reuben GarnerManaging Director at The Benchmark Company LLC00:38:53Got it. And then I know you've been working on mitigation efforts. Can you give any update or details there? Still on track to get it down, at least get China down to 20%. What kind of markets are you taking it to? Reuben GarnerManaging Director at The Benchmark Company LLC00:39:07And what are the tariff implications in those markets based on what you know today? I know it's fluid, but. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:39:15Yeah, it's fluid. I'll give you a couple of nuggets, Ruben. From our perspective, we feel like we're in very good shape with our movement of product out of China and our dual faucet strategy. So we do still have we have confidence that we have the ability to be approximately 20% out of China by year end. We are moving it to pick a name of the country. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:39:35I mean, these are not in volume order, but places like Thailand, Vietnam, India are a few that would benefit from the moves that we're making right now. Our product and our operation teams are doing a great job. Our sourcing team is doing a great job working with those suppliers. We've had opportunities that we've been developing over the last several years that now we're going to start moving volume to. We have other new opportunities that we'll be moving to. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:39:59It is fluid like you said, as things settle down and we see where the best place for us to have the most competitive product for our customers and the best value and the right quality is what will end up making a determination of where we'll round out. So Ruben, we'll have a lot to update you and everyone else on in future quarters. But it is fluid and I'm actually really proud of what the team's doing and the partnership with our customers to make sure that we can take care of our customers and ultimately our end users. A lot of moving pieces. Reuben GarnerManaging Director at The Benchmark Company LLC00:40:31Great. Thanks, guys. Good luck. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:40:33Welcome. Thanks a lot. Operator00:40:34Thank you. Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Mr. Al Dinolfi for closing remarks. Jon Michael AdinolfiDirector, President & CEO at Hillman Solutions00:40:44Thank you, everyone, for joining us this morning. We look forward to updating you on our progress soon. Hope everybody has a great day. Take care. Operator disconnect. Operator00:40:55Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.Read moreParticipantsExecutivesMichael KoehlerVP of Investor Relations & TreasuryJon Michael AdinolfiDirector, President & CEORobert KraftCFOAnalystsLee JagodaSenior Managing Director at CJS SecuritiesWilliam CarterFinancial Analyst at Stifel Financial CorpMichael FrancisEquity Research Associate at William BlairMatthew BouleySenior Equity Research Analyst - U.S. Homebuilding & Building Products at BarclaysBrian McNamaraMD & Senior Analyst - Consumer at Canaccord Genuity - Global Capital MarketsDavid MantheySenior Research Analyst at Robert W. Baird & CoReuben GarnerManaging Director at The Benchmark Company LLCPowered by