What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-20 compared with 2024-02-22 · 43 added, 49 removed, 189 unchanged (33% of the section changed)

9 unchanged sentences

personal protective equipment, such as gloves and eye-wear;

rope and chain;

and identification items, such as tags and letters, numbers, and signs.

9 unchanged sentences

Mick and Rick took over the day-to-day operations of the business in 1984.

During the early 1990s, the Company developed its National Field Service Group, which today includes 1,100 field service and sales representatives, to manage the complex assortment of Hillman products on its customers’ shelves.

During the early 1990s, the Company developed its National Field Service Group, which today includes over 1,200 field service and sales representatives, to manage the complex assortment of Hillman products on its customers’ shelves.

Over the next three decades Hillman continued to win new business, expanding from traditional hardware stores to big box and home improvement retailers, and into adjacent product categories through multiple strategic acquisitions.

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In 2021, Hillman became a publicly traded company, listing its shares on the Nasdaq stock exchange under the ticker symbol “HLMN” by virtue of a merger with a Special Purpose Acquisition Company ("SPAC").

See Note 3 - Merger Agreement of the Notes to Consolidated Financial Statements for additional information.

Hillman’s legacy of service has remained unchanged throughout its history, and it continues to take care of its customers first.

Nasdaq listing - 2021

During 2021, the Company began exploring ways to further expand is access to the capital markets by becoming a publicly traded entity.

On July 14, 2021, privately held HMAN Group Holdings Inc.

("Old Hillman"), and Landcadia Holdings III, Inc.

(“Landcadia” and after the Business Combination described herein, “New Hillman”), a SPAC, consummated the previously announced business combination (the “Closing”) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, the "Merger Agreement”).

Unless the context indicates otherwise, the discussion of the Company and its financial condition and results of operations is with respect to New Hillman following the closing date and Old Hillman prior to the closing date.

See Note 3 - Merger Agreement of the Notes to Consolidated Financial Statements for additional information.

In connection with the Closing, the Company entered into a new credit agreement (the “Term Credit Agreement”), which provided for a new funded term loan facility of $835.0 million and a delayed draw term loan facility of $200.0 million (of which $16.0 million was drawn).

As of July 2023, the delayed draw term loan facility expired.

The Company also entered into an amendment to their existing asset-based revolving credit agreement, extending the maturity and conformed certain provisions to the Term Credit Agreement.

The proceeds of the funded term loans under the Term Credit Agreement and revolving credit loans under the ABL Credit Agreement were used, together with other available cash, to (1) refinance in full all outstanding term loans and to terminate all outstanding commitments under the credit agreement, dated as of May 31, 2018, (2) refinance outstanding revolving credit loans, and (3) redeem in full senior notes due July 15, 2022 (the “6.375% Senior Notes”).

Additionally, we fully redeemed the 11.6% Junior Subordinated Debentures.

In connection with the refinancing, we incurred a loss of $8.1 million and paid $38.7 million in financing fees, of which $21.0 million were recorded as a financing activity.

See Note 9 - Long-Term Debt of the Notes to Consolidated Financial Statements for additional information.

Hillman Group

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builder's hardware;

personal protective equipment, such as gloves and eye-wear;

rope and chain;

protective solutions, such as gloves, eye-wear, and cleaning rags;

and identification items, such as tags and letters, numbers, and signs to retail outlets, primarily hardware stores, home centers and mass merchants, pet supply stores, grocery stores, and drug stores.

We complement our extensive product selection with regular retailer visits by our field sales and service organization.

3 | December 30, 2023 Form 10-K

We market and distribute a wide variety of Stock Keeping Units (“SKUs”) of small, hard-to-find and hard-to-manage hardware items.

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Vendors are also evaluated based on delivery performance and the accuracy of their shipments.

3 | December 28, 2024 Form 10-K

Hardware and Protective Solutions

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Wall Hanging, Threaded Rod and Metal Shapes;

Rope and Chain;

Letters, Numbers, and Signs ("LNS");

and Personal Protective Equipment.

and Personal Protective Equipment, such as gloves and eye-wear.

Our Fastener business consists of three categories:

core fasteners, construction fasteners, and anchors sold under a variety of brands including Hillman, Fas-n-Tite, Deck-Plus, and Power-Pro.

core fasteners, construction fasteners, and anchors.

These are sold under a variety of brands including Hillman, Fas-n-Tite, Deck-Plus, and Power Pro.

Core fasteners include nuts, bolts, screws, washers, and specialty items.

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Builders Hardware includes a variety of common household items such as coat hooks, door stops, hinges, gate latches, and decorative hardware.

We market the builder's hardware products under the Hardware Essentials® brand and provide the retailer with innovation in both product and merchandising solutions.

We market the builder's hardware products under the Hardware Essentials® brand and provide our retailer partners with innovation in both product and merchandising solutions.

The Hardware Essentials® program utilizes modular packaging, color coding, and integrated merchandising to simplify the shopping experience for consumers.

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In addition, we are the primary supplier of Metal Shapes to many wholesalers throughout the country.

With our acquisition of Koch in January 2024, we are now a premier provider and merchandiser of rope and twine, chain and wire rope, and related hardware products.

LNS includes product lines that target both the homeowner and commercial user.

Product lines within this category include individual and/or packaged letters, numbers, signs, safety related products (e.g.

911 signs), driveway markers, and a variety of sign accessories, such as sign frames.

911 signs), driveway markers, and a variety of sign accessories.

Our expansive Personal Protective Equipment category covers many uses for DIYer ("Do It Yourself") around the house and for the professional at the job site.

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Digz® gardening gloves and more;

as well as cleaning and all-

4 | December 30, 2023 Form 10-K

purpose gloves.

as well as cleaning and all-purpose gloves.

As a category leader in work gloves, our portfolio is founded on design and consumer driven innovation.

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Focusing on innovative materials, intuitive design, and industry trends, we expect growth in the Hardware and Protective Solutions segment.

With our acquisition of Intex in August 2024, our cleaning products category now includes wiping cloths, consumable rags, and cleaning textiles used for painting, general cleaning, maintenance, janitorial and auto/marine care applications.

Hardware and Protective Solutions generated approximately $1,094.4 million, $1,074.6 million and $1,068.7 million of revenues in the years ended December 28, 2024, December 30, 2023, and December 31, 2022, respectively.

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Our Robotics and Digital Solutions segment consists primarily of software-enabled robotic key duplication and engraving solutions that are tailored to the unique needs of the consumer.

Robotics and Digital Solutions products are located in high-traffic environments where retailers can provide consumers with on-the-spot, customized licensed and unlicensed key and engraving options.

Robotics and Digital Solutions products are located in high-foot traffic areas where retailers can provide consumers with on-the-spot, customized licensed and unlicensed key and engraving options.

Our offerings include store associate assisted key duplication and self-service robotic engraving and key duplication kiosks;

together with related software, systems, keys, and key accessories sold in proximity to the kiosks.

Our services include product and category management, merchandising services, and access to our proprietary robotic key duplicating and engraving software platforms and equipment.

Our services include product and category management,

4 | December 28, 2024 Form 10-K

merchandising services, and access to our proprietary robotic key duplicating and engraving software platforms and equipment.

We design and manufacture proprietary software and equipment in our Boulder, Colorado and Tempe, Arizona facilities;

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We believe we provide the most diverse key duplication systems in the industry, through our unique combination of self-service kiosk technology and store associate assisted duplication systems.

Equipment diversity allows us to meet the individual needs of retailers.

Equipment branding allows us to meet the individual needs of retailers.

Our self-service solutions are driven by our MinuteKey technology, while store associate assisted duplication currently uses the state-of-the-art KeyKrafter® equipment and other legacy duplication machines.

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Innovation has played a major role in the development of our engraving business unit.

5 | December 30, 2023 Form 10-K

original Quick-Tag® consumer-operated kiosk system to the proprietary laser system of TagWorks®, we continue to lead the industry with consumer-friendly engraving solutions.

From the original Quick-Tag® consumer-operated kiosk system to the proprietary laser system of TagWorks®, we continue to lead the industry with consumer-friendly engraving solutions.

As in our key business, we retain ownership of the key engraving equipment and market and sell blank tags.

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The Canada segment also produces made to order screws and self-locking fasteners for automotive suppliers, OEMs, and industrial distributors.

In the first quarter of 2023, the Company realigned its Canada segment to include the Canada portions of the Protective Solutions and MinuteKey businesses, which are now operating under the Canada segment leadership team.

Previously, the results of the Canada portion of the Protective Solutions business were reported in the Hardware and Protective Solutions segment and the Canada portion of the MinuteKey business was reported in the Robotics and Digital Solutions segment and were operating under those respective segment leadership teams.

Our Canada segment generated approximately $147.9 million, $156.5 million and $172.0 million of revenues in the years ended December 28, 2024, December 30, 2023, and December 31, 2022, respectively.

5 | December 28, 2024 Form 10-K

Markets and Customers

We sell our products to national accounts such as Home Depot, Lowe’s, Menard’s, PETCO, PetSmart, Tractor Supply, and Walmart.

We sell our products to national accounts such as Home Depot, Lowe’s, Tractor Supply, Walmart, Menard’s, PETCO, and PetSmart.

Our status as a national supplier of proprietary products to big box retailers allows us to develop a strong market position and high barriers to entry within our product categories.

We service a wide variety of franchise and independent retail outlets.

These individual dealers are typically members of the larger cooperatives, such as Ace Hardware, True Value, and Do-It-Best.

We ship directly to the cooperative's retail locations and also supply many items to the cooperative's central warehouses.

These individual dealers are typically members of the larger cooperatives, such as Ace Hardware and Do It Best Corp.

We ship directly to the cooperative members' independent retail locations and also supply many items to the cooperative's central warehouses.

These central warehouses distribute to their members that do not have a requirement for Hillman's in-store service.

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We sell our products to a large volume of customers, the top two of which accounted for approximately $603.1 million, or approximately 41% of our total revenues in 2024.

For the year ended December 30, 2023, Home Depot was the single largest customer, representing approximately $344.1 million or 23.3% of our total revenues.

Lowe's was the second largest at approximately $296.3 million or 20.1%.

No other customer accounted for more than 10% of total revenue in 2023.

In each of the years ended December 30, 2023, December 31, 2022, and December 25, 2021, we derived over 10% of our total revenues from Lowe's and Home Depot which operated in each of our operating segments.

For the year ended December 28, 2024, Home Depot was the single largest customer, representing approximately $325.7 million or 22.1% of our total revenues and Lowe's was the second largest customer at approximately $277.5 million or 18.8% of our total revenues.

No other customer accounted for more than 10% of total revenues in 2024.

In the years ended December 28, 2024, December 30, 2023 and December 31, 2022, we derived over 10% of our total revenues from Lowe's and Home Depot which operated in each of our operating segments.

See Note 17 - Concentration of Credit Risks of the Notes to Consolidated Financial Statements for additional information.

Certain customers operate using a purchasing cooperative(s) business model.

In this model, independently owned hardware stores make purchases directly from the Company and are invoiced through a billing arrangement with a cooperative.

Under this arrangement, the Company would invoice and receive payment from the cooperative for the product shipped directly to the store, and the cooperative would be responsible for invoicing and collecting from the independently owned hardware store.

Due to the nature of the cooperative billing arrangement, the risk of collection of the receivables generated by sales to these independently owned hardware stores is concentrated with the cooperative.

The Company does not believe a sales concentration exists in these scenarios, as the independently owned hardware stores can continue to make purchases from the Company via a direct bill arrangement or via another purchasing cooperative.

As of December 28, 2024 approximately 15% of the Company's accounts receivable was derived through the Ace Hardware purchasing cooperative.

See Note 17 - Concentration of Credit Risks of the Notes to Consolidated Financial Statements for additional information.

Hillman continues to expand its B2B eCommerce platform allowing certain customers to order online through the Company’s website, www.hillmangroup.com .

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We believe that our primary competitive advantage is rooted in our ability to provide a greater level of customer service than our competitors.

We partner with our customers to understand the unmet needs of consumers, design creative solutions, and commercialize those solutions, bringing them to life in both physical and digital channels through a tight alignment between the product management, marketing communications, and channel

6 | December 30, 2023 Form 10-K

marketing functions.

We provide best in class support and customer service at every touch point for our retail partners.

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This team also prepares custom plan-o-grams of displays to fit the needs of any store and establishes programs that meet customers' requirements for pricing, invoicing, and other needs.

This group also benefits from daily internal support from our inside sales and customer service teams.

This group also benefits from daily internal support from our inside sales and customer

6 | December 28, 2024 Form 10-K

service teams.

On average, each sales representative is responsible for approximately 73 full service accounts that the sales representative calls on approximately every two weeks.

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Other competitors are local and regional distributors.

Competitors in the pet tag market are specialty retailers, direct mail order, and retailers with in-store mail order capability.

Competitors in the pet tag market are specialty retailers, direct online order, and retailers with in-store mail order capability.

The Quick-Tag®, FIDO®, and TagWorks® systems have patent protected technology that is a major barrier to entry and helps to preserve this market segment.

20 unchanged sentences

1 Data spans 12 months between January 2024 and December 2024.

7 | December 30, 2023 Form 10-K

Attraction, Development, and Retention

The success of our efforts to grow our business depends on the contributions and abilities of key executives, our sales force, and other personnel.

Our Human Resources department leads the search to reach a diverse talent pool.

Our Human Resources department leads the search to reach a large talent pool.

We have a standard framework for posting jobs, interviewing for open positions, and onboarding new employees.

We offer employees resources to continuously improve their skills and performance with the goal of further cultivating the diverse talent on our team.

We offer employees resources to continuously improve their skills and performance with the goal of further cultivating our team.

We seek people who are demonstrate our core values:

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Diversity and Inclusion

We are committed to actions that build an inclusive and equitable workplace where diversity is valued and leveraged.

7 | December 28, 2024 Form 10-K

We are committed to actions that build an inclusive and equitable workplace where all employees are valued and leveraged.

We ask our employees to bring their authentic selves to work every day and this shows in both our products and our services.

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We do not intend the address to be an active link or to incorporate the contents of the website into this report.

8 | December 30, 2023 Form 10-K

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business