Hillman Reports Third Quarter 2024 Results
CINCINNATI, Nov. 05, 2024 (GLOBE NEWSWIRE) -- Hillman Solutions Corp. (Nasdaq: HLMN) (the “Company” or “Hillman”), a leading provider of hardware products and merchandising solutions, reported financial results for the thirteen and thirty-nine weeks ended September 28, 2024.
Third Quarter 2024 Highlights (Thirteen weeks ended September 28, 2024)
- Net sales decreased (1.4)% to $393.3 million compared to $398.9 million in the prior year quarter
- Net income totaled $7.4 million, or $0.04 per diluted share, compared to $5.1 million, or $0.03 per diluted share, in the prior year quarter
- Adjusted diluted EPS1 was $0.16 per diluted share compared to $0.11 per diluted share in the prior year quarter
- Adjusted EBITDA1 totaled $72.6 million compared to $66.8 million in the prior year quarter
- Acquired Intex DIY, a leading supplier of wiping cloths, consumable rags and cleaning textiles
- Subsequent to quarter end, Hillman won divisional 2024 Vendor Partner of the Year in Hardlines at Lowe 's and won 2024 Partner of the Year in Hardware at Home Depot
Third Quarter YTD 2024 Highlights (Thirty-nine weeks ended September 28, 2024)
- Net sales decreased (0.5)% to $1,123.0 million compared to $1,128.7 million in the prior year period
- Net income totaled $18.5 million, or $0.09 per diluted share, compared to net income of $0.5 million, or $0.00 per diluted share, in the prior year period
- Adjusted diluted EPS1 was $0.42 per diluted share compared to $0.30 per diluted share in the prior year period
- Adjusted EBITDA1 totaled $193.2 million compared to $165.0 million in the prior year period
- Net cash provided by operating activities was $140.2 million compared to $171.5 million in the prior year period
- Free Cash Flow1 totaled $76.0 million compared to $119.3 million in the prior year period
Balance Sheet and Liquidity at September 28, 2024
- Gross debt was $758.6 million, compared to $760.9 million on December 30, 2023, and $811.1 million on September 30, 2023
- Net debt1 decreased to $698.7 million, compared to $722.4 million on December 30, 2023, and $771.8 million on September 30, 2023
- Liquidity available totaled $324.6 million, consisting of $264.8 million of available borrowing under the revolving credit facility and $59.8 million of cash and equivalents
- Net debt1 to trailing twelve month Adjusted EBITDA improved to 2.8x from 3.3x on December 30, 2023, and 3.7x on September 30, 2023
Management Commentary
"Our strong results for the third quarter were driven by efficient operations across the organization while taking great care of our customers, " commented Doug Cahill, Chairman, President and CEO of Hillman. "Our 1,100 field sales and service folks continue to regularly manage the aisle for our customers, and our operations team has done a great job shipping our 114,000 SKUs to our customers on time and in full - demonstrated by our year-to-date fill rate of 95 percent. "
“During the quarter we acquired Intex DIY, a leading supplier of cleaning rags, cloths, and textiles. This acquisition adds new products to our portfolio, and allows us to sell into new aisles and to new customers. We continue to seek bolt-on acquisitions like Intex DIY, that allow us to leverage our competitive moat to fuel long-term organic growth. "
"Subsequent to the quarter end, we won 2024 vendor partner of the year awards at our top two customers, Lowe 's and Home Depot. We are proud of this recognition and grateful for the hardworking Hillman team that made this happen. Taking care of our customers has always been the lifeblood of this company and has been the key driver our long-term success. As we look forward, the partnership and trust we have with our customers and our new business pipeline give us confidence that we are well positioned to grow our top and bottom line in 2025. "
Full Year 2024 Guidance - Updated
Based on year-to-date performance and improved visibility on the remainder of the year, management is updating its guidance most recently provided on August 6, 2024 with Hillman 's second quarter 2024 results.
| Previous FY 2024 Guidance | Updated FY 2024 Guidance | |
| Net Sales | $1.44 to $1.48 billion | $1.455 to $1.485 billion |
| Adjusted EBITDA1 | $240 to $250 million | Approx. $250 million |
| Free Cash Flow1 | $100 to $120 million | $100 to $115 million |
Rocky Kraft, Hillman 's chief financial officer commented: "We are increasing our top and bottom line guidance to reflect the acquisition of Intex, which closed in August of this year, and our strong bottom line results. We also lowered the top end of our free cash flow guide to better fall in line with our expectations. "
1) Denotes Non-GAAP metric. For additional information, including our definitions, use of, and reconciliations of these metrics to the most directly comparable financial measures under GAAP, please see the reconciliations toward the end of the press release.
Third Quarter 2024 Results Presentation
Hillman plans to host a conference call and webcast presentation today, November 5, 2024, at 8:30 a.m. Eastern Time to discuss its results. Chairman, President, and Chief Executive Officer Doug Cahill; Chief Operating Officer Jon Michael Adinolfi, and Chief Financial Officer Rocky Kraft will host the results presentation.
Date:Tuesday, November 5, 2024
Time:8:30 a.m. Eastern Time
Listen-Only Webcast: https://edge.media-server.com/mmc/p/fs2k9czt/
A webcast replay will be available approximately one hour after the conclusion of the call using the link above.
Hillman’s quarterly presentation and Form 10-Q are expected to be filed with the SEC and posted to its Investor Relations website, https://ir.hillmangroup.com, prior to the webcast presentation.
About Hillman Solutions Corp.
Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman Solutions Corp. (“Hillman”) and its subsidiaries are leading North American providers of complete hardware solutions, delivered with outstanding customer service to over 46,000 locations. Hillman is celebrating 60 years of service this year, a significant milestone achieved by maintaining strong company values, an innovative culture, and delivering a “small business” experience with “big business” efficiency. 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. For more information on Hillman, visit www.hillman.com.
Forward Looking Statements
All statements made in this press release that are consider to be forward-looking are made in good faith by the Company and are intended to qualify for the safe harbor from liability established by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. You should not rely on these forward-looking statements as predictions of future events. Words such as "expect, " "estimate, " "project, " "budget, " "forecast, " "anticipate, " "intend, " "plan, " “target”, “goal”, "may, " "will, " "could, " "should, " "believes, " "predicts, " "potential, " "continue, " and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company 's control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) unfavorable economic conditions that may affect our and our customers’, suppliers’ and other business partners’ operations, financial condition and cash flows including spending on home renovation or construction projects, inflation, recessions, instability in the financial markets or credit markets; (2) increased supply chain costs, including raw materials, sourcing, transportation and energy; (3) the highly competitive nature of the markets that we serve; (4) the ability to continue to innovate with new products and services; (5) direct and indirect costs associated with the May 2023 ransomware attack, and our receipt of expected insurance receivables associated with that cyber security incident; (6) seasonality; (7) large customer concentration; (8) the ability to recruit and retain qualified employees; (9) the outcome of any legal proceedings that may be instituted against the Company; (10) adverse changes in currency exchange rates; or (11) regulatory changes and potential legislation that could adversely impact financial results. The foregoing list of factors is not exclusive, and readers should also refer to those risks that are included in the Company’s filings with the Securities and Exchange Commission (“SEC”), including the Annual Report on Form 10-K filed on February 22, 2024. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward looking statements.
Except as required by applicable law, the Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this communication to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.
Contact:
Michael Koehler
Vice President of Investor Relations & Treasury
513-826-5495
IR@hillmangroup.com
HILLMAN SOLUTIONS CORP.
Condensed Consolidated Statement of Net Income (Loss), GAAP Basis
(dollars in thousands) Unaudited
| Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 | Thirty-nine Weeks Ended September 28, 2024 | Thirty-nine Weeks Ended September 30, 2023 | ||||||||||||
| Net sales | $ | 393,296 | $ | 398,943 | $ | 1,123,033 | $ | 1,128,669 | |||||||
| Cost of sales (exclusive of depreciation and amortization shown separately below) | 203,700 | 222,644 | 581,806 | 643,652 | |||||||||||
| Selling, warehouse, general and administrative expenses | 130,261 | 113,359 | 369,980 | 335,876 | |||||||||||
| Depreciation | 17,948 | 14,434 | 50,583 | 44,939 | |||||||||||
| Amortization | 15,354 | 15,583 | 45,857 | 46,733 | |||||||||||
| Other (income) expense | (881 | ) | (1,819 | ) | 3 | 841 | |||||||||
| Income from operations | 26,914 | 34,742 | 74,804 | 56,628 | |||||||||||
| Interest expense, net | 15,108 | 16,728 | 44,316 | 52,880 | |||||||||||
| Refinancing costs | — | — | 3,008 | — | |||||||||||
| Income before income taxes | 11,806 | 18,014 | 27,480 | 3,748 | |||||||||||
| Income tax expense | 4,372 | 12,957 | 9,003 | 3,278 | |||||||||||
| Net income | $ | 7,434 | $ | 5,057 | $ | 18,477 | $ | 470 | |||||||
| Basic income per share | $ | 0.04 | $ | 0.03 | $ | 0.09 | $ | 0.00 | |||||||
| Weighted average basic shares outstanding | 196,297 | 194,794 | 195,914 | 194,662 | |||||||||||
| Diluted income per share | $ | 0.04 | $ | 0.03 | $ | 0.09 | $ | 0.00 | |||||||
| Weighted average diluted shares outstanding | 199,034 | 196,575 | 198,370 | 195,832 |
HILLMAN SOLUTIONS CORP.
Condensed Consolidated Balance Sheets
(dollars in thousands)
Unaudited
| September 28, 2024 | December 30, 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 59,820 | $ | 38,553 | |||
| Accounts receivable, net of allowances of 10,365 (2,770 - 2023) | 129,633 | 103,482 | |||||
| Inventories, net | 419,385 | 382,710 | |||||
| Other current assets | 15,566 | 23,235 | |||||
| Total current assets | 624,404 | 547,980 | |||||
| Property and equipment, net of accumulated depreciation of 374,289 (333,875 - 2023) | 221,769 | 200,553 | |||||
| Goodwill | 829,246 | 825,042 | |||||
| Other intangibles, net of accumulated amortization of 516,026 (470,791 - 2023) | 622,562 | 655,293 | |||||
| Operating lease right of use assets | 85,254 | 87,479 | |||||
| Other assets | 14,332 | 14,754 | |||||
| Total assets | $ | 2,397,567 | $ | 2,331,101 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 165,809 | $ | 140,290 | |||
| Current portion of debt and financing lease liabilities | 13,039 | 9,952 | |||||
| Current portion of operating lease liabilities | 16,331 | 14,407 | |||||
| Accrued expenses: | |||||||
| Salaries and wages | 29,645 | 22,548 | |||||
| Pricing allowances | 6,693 | 8,145 | |||||
| Income and other taxes | 7,700 | 6,469 | |||||
| Other accrued liabilities | 29,895 | 21,309 | |||||
| Total current liabilities | 269,112 | 223,120 | |||||
| Long-term debt | 730,666 | 731,708 | |||||
| Deferred tax liabilities | 130,403 | 131,552 | |||||
| Operating lease liabilities | 75,585 | 79,994 | |||||
| Other non-current liabilities | 10,577 | 10,198 | |||||
| Total liabilities | $ | 1,216,343 | $ | 1,176,572 | |||
| Commitments and contingencies (Note 6) | |||||||
| Stockholders ' equity: | |||||||
| Common stock, 0.0001 par, 500,000,000 shares authorized, 196,514,508 issued and outstanding at September 28, 2024 and 194,913,124 issued and outstanding at December 30, 2023 | 20 | 20 | |||||
| Additional paid-in capital | 1,438,074 | 1,418,535 | |||||
| Accumulated deficit | (217,729 | ) | (236,206 | ) | |||
| Accumulated other comprehensive loss | (39,141 | ) | (27,820 | ) | |||
| Total stockholders ' equity | 1,181,224 | 1,154,529 | |||||
| Total liabilities and stockholders ' equity | $ | 2,397,567 | $ | 2,331,101 |
HILLMAN SOLUTIONS CORP.
Condensed Consolidated Statement of Cash Flows
(dollars in thousands)
Unaudited
| Thirty-nine Weeks Ended September 28, 2024 | Thirty-nine Weeks Ended September 30, 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 18,477 | $ | 470 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 96,440 | 91,672 | |||||
| Deferred income taxes | (1,326 | ) | 1,835 | ||||
| Deferred financing and original issue discount amortization | 3,807 | 3,993 | |||||
| Stock-based compensation expense | 9,742 | 9,111 | |||||
| Customer bankruptcy reserve | 7,757 | — | |||||
| Loss on debt restructuring | 3,008 | — | |||||
| Cash paid to third parties in connection with debt restructuring | (1,554 | ) | — | ||||
| Loss on disposal of property and equipment | 56 | — | |||||
| Change in fair value of contingent consideration | 313 | 2,614 | |||||
| Changes in operating items: | |||||||
| Accounts receivable, net | (22,906 | ) | (42,883 | ) | |||
| Inventories, net | (2,036 | ) | 92,833 | ||||
| Other assets | (142 | ) | (5,697 | ) | |||
| Accounts payable | 17,822 | 27,220 | |||||
| Other accrued liabilities | 10,729 | (9,691 | ) | ||||
| Net cash provided by operating activities | 140,187 | 171,477 | |||||
| Net cash from investing activities | |||||||
| Acquisition of business, net of cash received | (57,762 | ) | (300 | ) | |||
| Capital expenditures | (64,196 | ) | (52,145 | ) | |||
| Other investing activities | (211 | ) | (318 | ) | |||
| Net cash used for investing activities | (122,169 | ) | (52,763 | ) | |||
| Cash flows from financing activities: | |||||||
| Repayments of senior term loans | (4,255 | ) | (86,383 | ) | |||
| Financing fees | (33 | ) | — | ||||
| Borrowings on revolving credit loans | 77,000 | 172,000 | |||||
| Repayments of revolving credit loans | (77,000 | ) | (197,000 | ) | |||
| Principal payments under finance lease obligations | (2,698 | ) | (1,687 | ) | |||
| Proceeds from exercise of stock options | 8,938 | 1,600 | |||||
| Payments of contingent consideration | (196 | ) | (1,175 | ) | |||
| Other financing activities | (103 | ) | 883 | ||||
| Net cash provided by (used for) financing activities | 1,653 | (111,762 | ) | ||||
| Effect of exchange rate changes on cash | 1,596 | 1,229 | |||||
| Net increase in cash and cash equivalents | 21,267 | 8,181 | |||||
| Cash and cash equivalents at beginning of period | 38,553 | 31,081 | |||||
| Cash and cash equivalents at end of period | $ | 59,820 | $ | 39,262 |
Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
The Company uses non-GAAP financial measures to analyze underlying business performance and trends. The Company believes that providing these non-GAAP financial measures enhances the Company’s and investors’ ability to compare the Company’s past financial performance with its current performance. These non-GAAP financial measures are provided as supplemental information to the financial measures presented in this press release that are calculated and presented in accordance with GAAP. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The Company’s definitions of its non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, reconciliations to GAAP financial measures are not provided for forward-looking non-GAAP measures. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Non-GAAP financial measures such as consolidated adjusted EBITDA and Adjusted Diluted Earnings per Share (EPS) exclude from the relevant GAAP metrics items that neither relate to the ordinary course of the Company’s business, nor reflect the Company’s underlying business performance.
Reconciliation of Adjusted EBITDA (Unaudited)
(dollars in thousands)
Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our businesses as well as to assist in the evaluation of underlying trends in our businesses. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of our businesses and from intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, as our management excludes these results when evaluating our operating performance. Our management use this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments as well as to allocate resources and capital to our operating segments. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.
| Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 | Thirty-nine Weeks Ended September 28, 2024 | Thirty-nine Weeks Ended September 30, 2023 | ||||||||||||
| Net income | $ | 7,434 | $ | 5,057 | $ | 18,477 | $ | 470 | |||||||
| Income tax expense | 4,372 | 12,957 | 9,003 | 3,278 | |||||||||||
| Interest expense, net | 15,108 | 16,728 | 44,316 | 52,880 | |||||||||||
| Depreciation | 17,948 | 14,434 | 50,583 | 44,939 | |||||||||||
| Amortization | 15,354 | 15,583 | 45,857 | 46,733 | |||||||||||
| EBITDA | $ | 60,216 | $ | 64,759 | $ | 168,236 | $ | 148,300 | |||||||
| Stock compensation expense | 3,257 | 3,069 | 9,742 | 9,111 | |||||||||||
| Restructuringand other(1) | 1,322 | 179 | 3,192 | 3,027 | |||||||||||
| Litigation expense(2) | — | 79 | — | 339 | |||||||||||
| Transaction and integration expense(3) | 477 | 289 | 993 | 1,599 | |||||||||||
| Change in fair value of contingent consideration | (467 | ) | (1,553 | ) | 313 | 2,614 | |||||||||
| Refinancing costs(4) | — | — | 3,008 | — | |||||||||||
| Customer bankruptcy reserve(5) | 7,757 | — | 7,757 | — | |||||||||||
| Total adjusting items | 12,346 | 2,063 | 25,005 | 16,690 | |||||||||||
| Adjusted EBITDA | $ | 72,562 | $ | 66,822 | $ | 193,241 | $ | 164,990 |
| (1) | Includes consulting and other costs associated with severance related to our distribution center relocations and corporate restructuring activities. |
| (2) | Litigation expense includes legal fees associated with our litigation with Hy-Ko Products Company LLC. |
| (3) | Transaction and integration expense includes professional fees and other costs related to the Koch Industries, Inc and Intex DIY, Inc acquisitions and the CCMP secondary offerings in 2023. |
| (4) | In the first quarter of 2024, we entered into a Repricing Amendment (2024 Repricing Amendment) on our existing Senior Term Loan due July 14, 2028. |
| (5) | Customer bankruptcy reserve includes amounts written off in connection with the True Value Chapter 11 bankruptcy filing on October 14, 2024. |
Reconciliation of Adjusted Diluted Earnings Per Share
(in thousands, except per share data)
Unaudited
We define Adjusted Diluted EPS as reported diluted EPS excluding the effect of one-time, non-recurring activity and volatility associated with our income tax expense. The Company believes that Adjusted Diluted EPS provides further insight and comparability in operating performance as it eliminates the effects of certain items that are not comparable from one period to the next. The following is a reconciliation of reported diluted EPS from continuing operations to Adjusted Diluted EPS from continuing operations:
| Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 | Thirty-nine Weeks Ended September 28, 2024 | Thirty-nine Weeks Ended September 30, 2023 | ||||||||||||
| Reconciliation to Adjusted Net Income | |||||||||||||||
| Net income | $ | 7,434 | $ | 5,057 | $ | 18,477 | $ | 470 | |||||||
| Remove adjusting items(1) | 12,346 | 2,063 | 25,005 | 16,690 | |||||||||||
| Remove amortization expense | 15,354 | 15,583 | 45,857 | 46,733 | |||||||||||
| Remove tax benefit on adjusting items and amortization expense(2) | (3,096 | ) | (1,055 | ) | (6,876 | ) | (4,907 | ) | |||||||
| Adjusted Net Income | $ | 32,038 | $ | 21,648 | $ | 82,463 | $ | 58,986 | |||||||
| Reconciliation to Adjusted Diluted Earnings per Share | |||||||||||||||
| Diluted Earnings per Share | $ | 0.04 | $ | 0.03 | $ | 0.09 | $ | 0.00 | |||||||
| Remove adjusting items(1) | 0.06 | 0.01 | 0.13 | 0.09 | |||||||||||
| Remove amortization expense | 0.08 | 0.08 | 0.23 | 0.24 | |||||||||||
| Remove tax benefit on adjusting items and amortization expense(2) | (0.02 | ) | (0.01 | ) | (0.03 | ) | (0.03 | ) | |||||||
| Adjusted Diluted Earnings per Share | $ | 0.16 | $ | 0.11 | $ | 0.42 | $ | 0.30 | |||||||
| Reconciliation to Adjusted Diluted Shares Outstanding(3) | |||||||||||||||
| Diluted Shares, as reported | 199,034 | 196,575 | 198,370 | 195,832 | |||||||||||
| Non-GAAP dilution adjustments: | |||||||||||||||
| Dilutive effect of stock options and awards | — | — | — | — | |||||||||||
| Adjusted Diluted Shares | 199,034 | 196,575 | 198,370 | 195,832 |
Note: Adjusted EPS may not add due to rounding.
| (1) | Please refer to "Reconciliation of Adjusted EBITDA " table above for additional information on adjusting items. See "Per share impact of Adjusting Items " table below for the per share impact of each adjustment. | ||
| (2) | We have calculated the income tax effect of the non-GAAP adjustments shown above at the applicable statutory rate of 25.1% for the U.S. and 26.2% for Canada except for the following items: | ||
| a. | The tax impact of stock compensation expense was calculated using the statutory rate of 25.1%, excluding certain awards that are non-deductible. | ||
| b. | The tax impact of acquisition and integration expense was calculated using the statutory rate of 25.1%, excluding certain charges that were non-deductible. | ||
| c. | Amortization expense for financial accounting purposes was offset by the tax benefit of deductible amortization expense using the statutory rate of 25.1%. | ||
| (3) | Diluted shares on a GAAP basis for thirteen and thirty-nine weeks ended September 28, 2024 include the dilutive impact of 2,737 and 2,456 options and awards, respectfully. Diluted shares on a GAAP basis for the thirteen and thirty-nine weeks ended September 30, 2023 include the dilutive impact of 1,781 and 1,170 options and awards, respectfully. |
Per Share Impact of Adjusting Items
| Thirteen Weeks Ended September 28, 2024 | Thirteen Weeks Ended September 30, 2023 | Thirty-nine Weeks Ended September 28, 2024 | Thirty-nine Weeks Ended September 30, 2023 | ||||||||||||
| Stock compensation expense | $ | 0.02 | $ | 0.02 | $ | 0.05 | $ | 0.05 | |||||||
| Restructuring and other costs | 0.01 | 0.00 | 0.02 | 0.02 | |||||||||||
| Litigation expense | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||
| Transaction and integration expense | 0.00 | 0.00 | 0.01 | 0.01 | |||||||||||
| Change in fair value of contingent consideration | 0.00 | (0.01 | ) | 0.00 | 0.01 | ||||||||||
| Refinancing costs | 0.00 | 0.00 | 0.02 | 0.00 | |||||||||||
| Customer bankruptcy reserve | 0.04 | 0.00 | 0.04 | 0.00 | |||||||||||
| Total adjusting items | $ | 0.06 | $ | 0.01 | $ | 0.13 | $ | 0.09 |
Note: Adjusting items may not add due to rounding.
Reconciliation of Net Debt
We define Net Debt as reported gross debt less cash on hand. Net debt is not defined under U.S. GAAP and may not be computed the same as similarly titled measures used by other companies. The Company believes that Net Debt provides further insight and comparability into liquidity and capital structure. The following is the calculation of Net Debt:
| September 28, 2024 | December 30, 2023 | ||||||
| Revolving loans | $ | — | $ | — | |||
| Senior term loan, due 2028 | 747,597 | 751,852 | |||||
| Finance leases and other obligations | 10,956 | 9,097 | |||||
| Gross debt | $ | 758,553 | $ | 760,949 | |||
| Less cash | 59,820 | 38,553 | |||||
| Net debt | $ | 698,733 | $ | 722,396 |
Reconciliation of Free Cash Flow
We calculate free cash flow as cash flows from operating activities less capital expenditures. Free cash flow is not defined under U.S. GAAP and may not be computed the same as similarly titled measures used by other companies. We believe free cash flow is an important indicator of how much cash is generated by our business operations and is a measure of incremental cash available to invest in our business and meet our debt obligations.
| Thirty-nine Weeks Ended September 28, 2024 | Thirty-nine Weeks Ended September 30, 2023 | ||||||
| Net cash provided by operating activities | $ | 140,187 | $ | 171,477 | |||
| Capital expenditures | (64,196 | ) | (52,145 | ) | |||
| Free cash flow | $ | 75,991 | $ | 119,332 |
Source: Hillman Solutions Corp.
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