What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-17 compared with 2025-02-20 · 116 added, 133 removed, 234 unchanged (52% of the section changed)

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Executive Overview and Trends in our Business

Net sales during 2024 decreased by 0.3% when compared to 2023.

Driving our results for the year were the net sales contributions from the two acquisitions Hillman closed on this year (Koch in January 2024 and Intex DIY in August 2024).

These were more than offset by a decline in net sales due to soft home improvement spending and price reductions during the year.

Hardware and Protective Solutions, which is our largest segment, making up 74.3% of our net sales, led the way with an increase of 1.8% which was mainly driven by the aforementioned acquisitions.

Offsetting this was a decrease in our Robotics and Digital Solutions segment and our Canadian business.

Products across our business are primarily used by DIYers and small contractors for repair, maintenance, and remodel projects.

Because repair and maintenance projects are necessary no matter the economic environment, we believe our business is generally resilient to economic downturns.

Net sales during 2025 increased by 5.4% when compared to 2024.

Driving our performance for the year was the net sales contributions from new business wins, along with the contribution of net sales from the Intex DIY acquisition, which closed in August 2024, and the contribution of price increases, which were implemented during the year to offset an increase in costs related to tariffs.

These contributions to net sales were offset by the soft home improvement market during the year.

Hardware and Protective Solutions, our largest segment making up 76.9% of our net sales, led the way with an increase of 7.8%, while our Robotics and Digital Solutions segment returned to growth during 2025 contributing 1.6%.

Partially offsetting this growth was a decline in our Canadian business segment.

Products across our business are primarily used by DIYers and professionals shopping at our customers' retail locations for repair, maintenance, and remodel projects.

Because repair and maintenance projects are beneficial and often necessary no matter the economic environment, we believe our business is generally resilient to economic downturns.

However, remodel projects are more dependent upon macroeconomic variables, including existing home sales.

According to the National Association of Realtors, existing home sales in the U.S.

were at a 30-year low during 2024, totaling $4.06 million.

for 2025 were unchanged from 2024, which marked a 30-year low, totaling 4.1 million.

This was a headwind for our top line results during the year.

Our competitive moat, which consists of our 1,200 member field sales and service team, our ability to ship direct to the retail locations of our customers rather than their distribution network, and our 60+ years of experience set us apart from the competition.

As such, we launched multiple new business wins during the year and we won vendor of the year awards from our two largest customers, Home Depot and Lowe's.

This is the first time in Hillman's history that we have been recognized by our two largest customers as vendor of the year in the same year.

We are pleased with the progress we made during 2024.

Looking to 2025, we remain committed to driving value for our stakeholders, and believe that our competitive moat and long-standing relationships with customers will allow us to continue to win.

21 | December 28, 2024 Form 10-K

As such, we launched multiple new business wins during the year and we won vendor of the year awards from Do It Best and Home Depot Canada.

We continue to focus on taking great care of our customers which has been a key focus on the company for over 60-years.

We are pleased with our top and bottom line results during 2025, as both were records for Hillman.

Producing record top and bottom line results while successfully managing the dynamic and complex tariff situation is a testament to our team.

Looking to 2026, we remain committed to driving value for our stakeholders, taking great care of our customers, and continuing to grow our business.

Impact of Global Economic Conditions on our Results of Operation

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and Canadian retail markets including hardware stores, home centers, mass merchants, and other retailers.

Changes in current economic conditions, including inflationary pressures in the cost of inventory, transportation, and employee compensation, foreign currency volatility, interest rates, and the growing concerns of a potential recession, have impacted consumer discretionary income levels and spending.

Changes in current economic conditions, including inflationary pressures in the cost of inventory, transportation, and employee compensation, foreign currency volatility, and interest rates, have impacted consumer discretionary income levels and spending.

Consumer discretionary income levels and spending impact the purchasing trends of our products by our retail customers.

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The purchase price of these products is routinely negotiated in U.S.

dollar amounts rather than the local currency of the vendors and our suppliers' profit margins decrease when the U.S.

dollar amounts rather than the local currency of the vendors and our suppliers' profit margins

22 | December 27, 2025 Form 10-K

decrease when the U.S.

dollar declines in value relative to the local currency.

This puts pressure on our suppliers to increase prices to us.

dollar increased in value relative to the CNY by approximately by 2.8% in 2024, increased by 2.9% in 2023, and increased by 8.3% in 2022.

dollar increased in value relative to the Taiwan dollar by approximately 7.1% in 2024, decreased by 0.4% in 2023, and increased by 10.8% in 2022.

dollar decreased in value relative to the CNY by approximately by 4.0% in 2025, increased by 2.8% in 2024, and increased by 2.9% in 2023.

dollar decreased in value relative to the Taiwan dollar by approximately 4.2% in 2025, increased by 7.1% in 2024, and decreased by 0.4% in 2023.

In addition, the negotiated purchase price of our products may be dependent upon market fluctuations in the cost of raw materials such as steel, zinc, and nickel used by our vendors in their manufacturing processes.

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We have a practice of hedging some of our Canadian subsidiary's purchases denominated in U.S.

dollar increased in value relative to the Canadian dollar by approximately 9.0% in 2024, decreased by 2.4% in 2023, and increased by 5.7% in 2022.

dollar decreased in value relative to the Canadian dollar by approximately 5.2% in 2025, increased by 9.0% in 2024, and decreased by 2.4% in 2023.

We import products which are subject to customs requirements and to tariffs and quotas set by governments through mutual agreements and bilateral actions.

tariffs on steel and aluminum and other imported goods has increased our product costs and required us to increase prices on the affected products.

Recent tariffs against goods imported from China, Mexico, and Canada enacted on February 1, 2025 by the Trump Administration and any retaliatory tariffs issued in response thereto, could also increase prices on affected products.

Recent tariffs against goods imported from China, Mexico, and Canada enacted since February 1, 2025 by the Trump Administration and any retaliatory tariffs issued in response thereto, have also caused us to increase prices on affected products.

Recent developments

Acquisition of Koch Industries, Inc.

On January 11, 2024, we completed the acquisition of Koch Industries, Inc.

("Koch"), a provider and merchandiser of rope and twine, chain and wire rope, and related hardware products for a total purchase price of $23.8 million.

Koch has business operations throughout North America and its financial results reside in our Hardware and Protective Solutions reportable segment.

Koch generated $39.9 million in net sales and $3.3 million in operating income for the year ended December 28, 2024.

Term Loan Repricing

On March 26, 2024, we entered into a Repricing Amendment (2024 Repricing Amendment) on our existing Senior Term Loan due July 14, 2028.

The 2024 Repricing Amendment (i) reduces the interest rate per annum and (ii) implements a 1% prepayment premium for the existing Term Loan to apply to Repricing Transactions that occur within six months after the effective date of the 2024 Repricing Amendment.

In connection with the closing of the 2024 Repricing Amendment, we expensed $3.0 million consisting of $1.6 million of existing fees written off and $1.5 million in new fees expensed.

22 | December 28, 2024 Form 10-K

Acquisition of Intex DIY, Inc.

On August 23, 2024, we completed the acquisition of Intex DIY, Inc.

("Intex"), a leading supplier of wiping cloths, consumable rags, and cleaning textiles for a total purchase price of $34.1 million.

This acquisition expands Hillman’s offerings in the cleaning products category.

Intex is based in Georgia and sells to customers located throughout North America and its financial results will reside in the Company's Hardware and Protective Solutions reportable segment.

Intex generated $21.1 million in net sales and $2.0 million in operating income for the year ended December 28, 2024.

True Value Bankruptcy

On October 14, 2024, True Value Company, LLC and certain of its affiliates (collectively, "True Value"), a hardware brand and wholesaler selling to 4,500 independently operated locations, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware.

True Value accounted for approximately $8.8 million of our accounts receivable, net of rebates and discounts, as of the October 14, 2024 Chapter 11 bankruptcy filing date.

Concurrent with the announcement of the Chapter 11 bankruptcy filing, True Value also announced that it had entered into an agreement to sell substantially all of its business operations to Do It Best Corp., another home improvement industry peer as a "stalking horse", or lead, bidder.

The sale of True Value to Do It Best Corp.

closed on November 22, 2024.

The Company does not believe the bankruptcy will have a material negative impact on our future net sales.

With the completed sale to Do It Best Corp.

and conversion to direct billing with some stores, we believe we will maintain the majority of the existing sales previously attributed to True Value.

With respect to collectability of our accounts receivable, in the year ended December 28, 2024, we recorded a charge of $8.6 million representing the net receivable balances less the amount we expect to recover as an administrative claim pursuant to Section 503(b)(9) of the bankruptcy code.

The loss was recorded in selling, warehouse, general and administrative expenses.

All uncollectible receivables were written off in the fourth quarter of 2024 and are no longer included in our gross receivables or the allowances as of December 28, 2024.

Settlement of Dispute with Kiosk Development Partner

On December 16, 2024, the Company entered into a settlement agreement with a kiosk development partner (the “Kiosk Partner”), pursuant to which the Company paid the Kiosk Partner a $5.0 million settlement payment on December 30, 2024 to resolve all claims and disputes alleged by the Kiosk Partner.

See Item 3 - Legal Proceedings of this Annual Report and Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information.

The $5.0 million settlement was recorded within the Robotics and Digital Solution segment in Selling, Warehouse, and General and Administrative expense within the Consolidated Statements of Comprehensive Loss.

Tariff Environment

In 2025, the U.S.

government announced tariffs on imports from countries from which we import products and components.

Additionally, other countries have announced their own tariffs.

We estimate we source approximately 33% of our products from China, 33% from suppliers based in North America, and 33% from all other countries.

Tariffs have resulted in an increase in our net working capital and cost of sales.

We have raised our prices to offset the tariff costs, although these price increases could impact future demand for our products.

We continue to analyze the impact of these actions and what, if any, steps, including pricing actions, we may take to mitigate the impact of the tariffs.

Consistent with our normal course of business, we will continue exploring alternative suppliers in other countries to source quality products that provide the best value for our customers.

Segment Realignment

In the second quarter of 2025, the Company realigned its Hardware and Protective Solutions segment to include the sales of accessories, which are now managed by the Hardware and Protective Solutions leadership team.

Previously, accessories were included under the Robotics and Digital Solutions segment leadership team.

See Note 18 - Segment Reporting and Geographic Information of the Notes to Consolidated Financial Statements for additional information.

Share Repurchases

On July 31, 2025, the Board of Directors of the Company authorized a share repurchase program of up to $100.0 million (the “Repurchase Program”) of the Company's common stock.

The company has repurchased a total of 1.4 million shares for $12.4 million as of December 27, 2025.

See Note 10 - Equity and Accumulated Other Comprehensive Loss of the Notes to Consolidated Financial Statements for additional information.

Financial Summary and Other Key Metrics

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Shipping days are defined as non-holiday week-days, Monday through Friday of each week of the fiscal year.

• Net sales for the year ended December 28, 2024 were $1,472.6 million compared to net sales of $1,476.5 million for the year ended December 30, 2023, a decrease of approximately $3.9 million or 0.3%.

The decrease was primarily due to market softness and decreased volume, partially offset by net sales from our acquisition of Koch of $39.9 million and net sales from our acquisition of Intex of $21.1 million.

• Net income improved to $17.3 million, or $0.09 per diluted share, compared to a net loss of $9.6 million, or $(0.05) per diluted share for the year ended December 30, 2023.

• Net sales for the year ended December 27, 2025 were $1,552.2 million compared to net sales of $1,472.6 million for the year ended December 28, 2024, an increase of approximately $79.6 million or 5.4%.

23 | December 27, 2025 Form 10-K

• Net income improved to $40.3 million, or $0.20 per diluted share, compared to net income of $17.3 million, or $0.09 per diluted share for the year ended December 28, 2024.

• Adjusted EBITDA (1) totaled $275.3 million versus $241.8 million in the year ended December 28, 2024.

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Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income (loss) to Adjusted EBITDA.

23 | December 28, 2024 Form 10-K

Results of Operations

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Amortization 61,232 3.9% 61,274 4.2% 62,309 4.2%

Other expense (income), net 361 —% 12,843 0.9% (1,119) (0.1)%

Other (income) expense, net (722) —% 361 —% 12,843 0.9%

Income from operations 113,969 7.3% 88,801 6.0% 60,928 4.1%

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Personal Protective 270,937 17.5 % 229,925 15.6 % 41,012 17.8 % 216,403 14.7 % 13,522 6.2 %

Keys and Key Accessories

Keys and Key Fobs

188,954 12.2 % 178,083 12.1 % 10,871 6.1 % 186,031 12.6 % (7,948) (4.3) %

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Consolidated $ 1,552,224 $ 1,472,595 $ 79,629 $ 1,476,477 $ (3,882)

Hardware and Protective Solutions revenues consist primarily of the delivery of fasteners, anchors, specialty fastening products, and personal protective equipment such as gloves and eye-wear as well as in-store merchandising services for the related product category.

Hardware and Protective Solutions revenues consist primarily of the delivery of fasteners, anchors, specialty fastening products, and personal protective equipment such as gloves and eye-wear as well as accessories and in-store merchandising services for the related product category.

Robotics and Digital Solutions revenues consist primarily of sales of keys and identification tags through self-service key duplication and engraving kiosks.

It also includes our associate-assisted key duplication systems and key accessories.

It also includes our associate-assisted key duplication systems.

Canada revenues consist primarily of the delivery to Canadian customers of fasteners and related hardware items, threaded rod, keys, key duplicating systems, accessories, personal protective equipment, and identification items as well as in-store merchandising services for the related product category.

Net sales decreased $3.9 million in total during 2024.

The decrease in net sales was primarily driven by the factors described below:

Net sales increased $79.6 million in total during 2025.

The increase in net sales was primarily driven by the factors described below:

Hardware and Protective Solutions increased $86.0 million due to the following:

• Hardware sales increased $3.7 million primarily driven by $39.9 million of net sales added by the acquisition of Koch, offset by $27.3 million in reduced volume driven by market softness and $8.9 million in price reductions.

• Protective equipment sales increased by $16.1 million primarily driven by $21.1 million of net sales added by the acquisition of Intex, offset by $3.8 million in price reductions and $1.0 million in reduced volume driven by market softness.

Robotics and Digital Solutions sales decreased $15.1 million primarily due to decreases in key and engraving volume.

Canada net sales decreased $8.6 million primarily due to a $6.7 million decrease related to price reductions as well as a $2.1 million unfavorable impact of the exchange rate from Canadian dollars to U.S.

• Hardware sales increased $45.9 million primarily driven by $59.4 million in price increases offset by $13.9 million in reduced volume driven by market softness.

• Protective equipment sales increased by $40.0 million primarily driven by $40.5 million of net sales added by the acquisition of Intex.

Additionally, sales were impacted by price increases of $9.5 million offset by $9.5 million in reduced volume.

Robotics and Digital Solutions sales increased $3.5 million primarily driven by $14.3 million in price increases offset by $11.2 million in reduced volume.

Canada net sales decreased by $9.8 million primarily due to volume decreases of $4.8 million, an unfavorable impact of the exchange rate from Canadian dollars to U.S.

dollars of $2.8 million, and price decreases of $2.2 million.

Cost of Sales (excluding depreciation and amortization)

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Consolidated $ 795,875 $ 764,691 $ 31,184 $ 828,956 $ (64,265)

Hardware and Protective Solutions cost of sales as a percentage of net sales decreased primarily due to the decreased product and shipping costs.

Our Robotics and Digital Solutions cost of sales as a percentage of net sales decreased primarily due to a shift in product mix from full-service to self-service keys.

Canada cost of sales as a percentage of net sales decreased primarily due to decreased product and shipping cost.

Selling, Warehouse, and General and Administrative Expenses

Hardware and Protective Solutions cost of sales as a percentage of net sales decreased primarily due to the timing of price increases driven by higher tariff costs.

During 2025, we began taking pricing actions with our customers to align with the additional tariff costs we paid in 2025.

We expect higher tariff expense to be included in our cost of sales as we sell through the inventory purchased prior to the new tariffs and transition to selling inventory purchased after the new tariffs.

These were partially offset by a higher mix of Protective Solutions sales which generally have higher costs than Hardware Solutions products.

Our Robotics and Digital Solutions cost of sales as a percentage of net sales decreased primarily due to the impact of price increases and sales mix.

Canada cost of sales as a percentage of net sales was comparable to prior year.

25 | December 27, 2025 Form 10-K

Selling, Warehouse, and General and Administrative Expenses

The following table summarizes selling, warehouse, and general and administrative expense ("SG&A") by segment:

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Hardware and Protective Solutions SG&A increased in 2025 due to the following:

• Selling expense increased $10.7 million primarily due to increased compensation and benefit expense.

• Warehouse expense increased $0.8 million due to inflation in labor and shipping costs.

• Selling expense increased by $9.6 million primarily due to increased compensation and benefit expense.

• Warehouse expense increased $1.9 million due to inflation in shipping costs along with rent and maintenance.

Additionally, warehouse expense includes $1.0 million in costs incurred related to our Cincinnati, Ohio distribution center consolidation project.

• General and administrative (“G&A”) increased by $0.5 million.

We recorded a write off of $8.6 million of accounts receivable, net, in 2024 due to the True Value bankruptcy.

The remaining increase was primarily driven by increased incentive compensation and investment into information technology and security.

The increase was primarily driven by an increased investment into information technology along with increased compensation and benefit expenses and legal fees.

These current year increases were partially offset by lower bad debt expense in 2025 relative to 2024.

The year ended December 28, 2024 included a write off of $8.4 million of accounts receivable, net, due to True Value declaring bankruptcy.

Robotics and Digital Solutions SG&A increased in 2025 due to the following:

• Warehouse decreased by $1.3 million primarily due to the shift from full-service keys, which have a higher warehousing cost, to self-service keys.

• G&A increased by $2.9 million.

The increase was primarily driven by a $5.0 million settlement agreement with a kiosk development partner (see Note 15 - Commitments and Contingencies).

We also recorded a $0.3 million write off of accounts receivable, net related to the True Value bankruptcy.

These increased expenses were partially offset by reduced legal and consulting expense.

Canada SG&A increased in 2024 due to the following:

• Selling expense increased $1.2 million primarily due to increased incentive compensation expense.

• G&A increased by $1.4 million primarily due to severance costs associated with restructuring and incentive compensation.

• Selling expense increased by $6.4 million primarily due to the shift from full-service keys to self-service keys, which have a higher variable selling cost.

• Warehouse expense increased by $1.4 million due to inflation in labor and shipping costs.

• G&A decreased by $5.0 million.

The decrease was primarily due to a $5.0 million settlement agreement with a kiosk development partner in 2024 (see Note 15 - Commitments and Contingencies).

Canada SG&A decreased in 2025 due to the following:

• Selling expense decreased $0.3 million primarily due to lower severance costs in the current year as relative to 2024.

• Warehouse expense decreased $0.9 million primarily due to lower sales volumes along with improved operational efficiencies in addition to lower severance costs in the current year as relative to 2024 due to restructuring activities in the prior year.

• G&A was comparable to prior year.

Other Operating Expenses

Depreciation expense increased $9.4 million due to increased capital spend on merchandising racks and facility relocations completed in the prior year.

Amortization expense decreased $1.0 million primarily due to lower intangible asset balances following the write down of the carrying values of intangible assets to their fair value as a result of exiting a specific product line that occurred in the fourth quarter of 2023.

In the year ended December 28, 2024, other expense (income), net consisted primarily of an exchange rate loss of $0.9 million along with a $0.2 million loss on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob (see Note 14 - Fair Value Measurements of the Notes to Consolidated Financial Statements for additional information).

Offsetting the loss was income from certain rebates received.

In the year ended December 30, 2023, other expense (income), net consisted primarily of a $19.6 million impairment charge related to the write down of intangible assets, (see Note 2 - Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements for additional information) and a $4.9 million gain on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob.

Depreciation expense increased $11.1 million due to increased capital spend on merchandising racks along with key duplication kiosks.

Amortization expense was comparable to prior year.

In the year ended December 27, 2025, other (income) expense, net consisted primarily of a $0.2 million gain on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob (see Note 14 - Fair Value Measurements of the Notes to Consolidated Financial Statements for additional information) along with income from certain rebates received.

In the year ended December 28, 2024, other expense (income), net consisted primarily of an exchange rate loss of $0.9 million and a $0.2 million loss on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob.

Offsetting these losses was income from certain rebates received.

26 | December 27, 2025 Form 10-K

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Total segment income from operations $ 113,969 $ 88,801 $ 25,168 28.3 % $ 60,928 $ 27,873 45.7 %

Income from operations in our Hardware and Protective Solutions segment increased $48.4 million due to the changes in net sales, cost of sales, SG&A expense, and other expense (income), net described above.

Income from operations in our Hardware and Protective Solutions segment increased $30.4 million due to the changes in net sales, cost of sales, SG&A expense, and other (income) expense, net described above.

Depreciation expense increased by $6.3 million due to increased capital spend on merchandising racks and facility relocations completed in the prior year.

Income from operations in our Robotics and Digital Solutions segment decreased by $19.1 million primarily due to the changes in net sales, cost of sales, and SG&A expenses described above, including the $5.0 million settlement agreement and a decrease of $5.2 million in other expense driven by the changes in revaluation of the contingent consideration.

Offsetting the decrease was a $2.8 million increase in depreciation expense associated with increased capital spend on key machines.

Income from operations in our Robotics and Digital Solutions segment decreased by $3.2 million primarily due to the changes in net sales, cost of sales, and SG&A expenses described above and a $4.8 million increase in depreciation expense associated with increased capital spend on key machines.

Offsetting this increased expense was a gain of $0.5 million in other (income) expense driven by the changes in revaluation of the contingent consideration.

Canada's income from operations decreased by $2.0 million primarily due to the changes in net sales, cost of sales, and SG&A expenses described above.

Canada also recorded exchange rate loss of $0.7 million in 2024 compared to a gain of $0.1 million in 2023.

Canada also recorded exchange rate loss of $0.1 million in 2025 compared to a loss of $0.7 million in 2024.

Income (Loss) Before Income Taxes

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federal statutory tax rate due to certain non-deductible expenses.

In addition, the effective tax rate differed due to state and foreign income taxes and withholding taxes for distributions from our Canadian business.

In addition, the effective tax rate differed due to state and foreign income taxes and our federal research and development credit.

In 2024, the Company's effective tax rate differed from the U.S.

federal statutory tax rate primarily due to withholding taxes on distributions from our Canadian subsidiary.

In addition, the effective tax rate differed due to state and foreign income taxes and certain non-deductible expenses.

federal statutory tax rate primarily due to certain non-deductible expenses.

In addition, the effective tax rate differed due to state and foreign income taxes and withholding taxes on distributions from our Canadian subsidiary.

Year Ended December 28, 2024 vs Year Ended December 30, 2023

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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.

Change to Non-GAAP metrics

After dialogue with the SEC, we have revised our presentation of Adjusted EBITDA on a prospective basis to include the impact of a $8.6 million write off of receivables from True Value, which was previously excluded from the Non-GAAP figures.

The charge resulted from True Value’s Chapter 11 filing in October of 2024.

See the "Recent Developments" section of Management's Discussion and Analysis for additional information on this write off.

The following table presents a reconciliation of Net income (loss), the most directly comparable financial measures under GAAP, to Adjusted EBITDA for the periods presented:

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(1) Restructuring and other costs includes consulting and other costs associated with severance related to our distribution center relocations and corporate restructuring activities.

2024 and 2023 includes costs associated with the Cybersecurity Incident that occurred in May 2023, see Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information.

(2) Litigation expense include a settlement and legal fees paid in association with a dispute with a kiosk development partner, and litigation with the Hy-Ko Products Company LLC litigation (see Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information).

(3) Transaction and integration expense includes professional fees and other costs related to the Koch Industries, Inc.

2024 and 2023 include costs associated with the Cybersecurity Incident that occurred in May 2023, see Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information.

(2) Litigation expense includes an accrual for the tentative settlement of a California wage-hour class action / Private Attorneys General Act (PAGA) claim in 2025 along with a settlement and legal fees paid in association with a dispute with a kiosk development partner in 2024, and litigation with the Hy-Ko Products Company LLC litigation (see Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements for additional information).

(3) Transaction and integration expense includes professional fees and other costs related to acquisition activity, including without limitation 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 (see Note 7 - Long-Term Debt of the Notes to Consolidated Financial Statements for additional information).

(4) In the first quarters of 2025 and 2024, we entered into a Repricing Amendment (2025 Repricing Amendment and 2024 Repricing Amendment) on our existing Senior Term Loan due July 14, 2028 (see Note 7 - Long-Term Debt of the Notes to Consolidated Financial Statements for additional information).

(5) In the fourth quarter of 2023, we recorded an impairment charge in our Hardware and Protective Solutions segment of $24.6 million, primarily related to review of certain product offerings.

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As a result of this review we impaired $19.6 million of intangible assets and recorded inventory revaluation charges of $5.0 million.

28 | December 28, 2024 Form 10-K

The following tables present a reconciliation of segment operating income, the most directly comparable financial measures under GAAP, to segment Adjusted EBITDA for the periods presented (amounts in thousands).

Certain amounts in the prior year presentation between segments were reclassified to conform to the current year’s presentation:

28 | December 27, 2025 Form 10-K

Year Ended December 27, 2025 Hardware and Protective Solutions Robotics and Digital Solutions Canada

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Operating income $ 60,138 $ 20,549 $ 8,114

$ 8,366 $ 42,953 $ 9,609

Depreciation and amortization 82,446 42,661 4,933

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Change in fair value of contingent consideration — 228 —

Impairment charges 24,600 — —

Adjusted EBITDA $ 155,698 $ 70,275 $ 15,780

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Hardware and Protective Solutions Robotics and Digital Solutions Canada

Operating (loss) income $ 20,742 $ 3,541 $ 15,610

Operating income $ 11,644 $ 39,676 $ 9,608

Depreciation and amortization 76,757 40,055 4,828

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Transaction and integration expense 1,594 160 —

Impairment charges 24,600 — —

Change in fair value of contingent consideration — (4,936) —

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The following table presents the key categories of our consolidated statements of cash flows:

29 | December 28, 2024 Form 10-K

Year Ended December 27, 2025 Year Ended December 28, 2024 $ Change Year Ended December 30, 2023 $ Change

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Net cash used for financing activities (52,220) (39,268) (12,952) (161,976) 122,708

Net increase in cash and cash equivalents 5,957 7,472 (1,515) 16,476 (9,004)

Net (decrease) increase in cash and cash equivalents (17,234) 5,957 (23,191) 7,472 (1,515)

29 | December 27, 2025 Form 10-K

Operating Cash Flows:

Operating cash flows for the year ended December 28, 2024 were unfavorably impacted by increases in accounts receivable due to accounts receivable generated by the Koch business post acquisition.

Operating cash flows for the year ended December 27, 2025 were unfavorably impacted by increases in the costs of inventory and other accrued liabilities due to the recently enacted tariffs.

Operating cash flows for the year ended for the year ended December 28, 2024 were unfavorably impacted by increases in accounts receivable due to accounts receivable generated by the Koch business post acquisition.

Additionally, we saw increased accrued liabilities due to the timing of inventory purchases and payments.

Finally, in the current year we saw increases in accrued incentive compensation which favorably impacted our cash flow from operating activities.

Net cash provided by operating activities for the year ended December 30, 2023 were favorably impacted by reducing inventory as part of the Company's ongoing strategic initiative to lower inventory on hand during 2023.

Finally, in 2024 we saw increases in accrued incentive compensation which favorably impacted our cash flow from operating activities.

Investing Cash Flows:

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Acquisitions:

Intex DIY, Inc.

On August 23, 2024, the Company completed the acquisition of Intex DIY, Inc.

("Intex"), a leading supplier of wiping cloths, consumable rags, and cleaning textiles for a total purchase price of $34.1 million.

Intex has business operations throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment.

(see Note 5 - Acquisitions of the Notes to Consolidated Financial Statements for additional information).

Koch Industries, Inc.

On January 11, 2024, the Company completed the acquisition of Koch Industries, Inc.

("Koch"), a premier provider and merchandiser of rope and twine, chain and wire rope, and related hardware products for a total purchase price of $23.8 million.

Koch has business operations throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment (see Note 5 - Acquisitions of the Notes to Consolidated Financial Statements for additional information).

In 2025, the Company did not complete any new acquisitions.

In 2024, the Company completed its acquisitions of Koch Industries, Inc and Intex DIY, Inc for a total purchase price of $23.8 million and $34.1 million, respectively (see Note 5 - Acquisitions of the Notes to Consolidated Financial Statements for additional information).

Financing Cash Flows:

The Company used $106.4 million of cash for principal payments on the senior term loan, including a $100.0 million prepayment made on October 3, 2024 against the outstanding term loan balance without payment of a premium or penalty.

The Company used $8.5 million of cash for principal payments on the senior term loan.

As of December 27, 2025, we have outstanding borrowings of $637.0 million on the term loan.

In 2024 the Company used $106.4 million of cash for principal payments on the senior term loan, including a $100.0 million prepayment against the outstanding term loan balance without payment of a premium or penalty.

See Note 7 - Long-Term Debt of the Notes to Consolidated Financial Statements for additional information.

ABL Revolver:

Our revolver draws, net of repayments, used cash of $62.0 million in the year ended December 28, 2024 as part of the Company's initiative to pay down the term loan along with the acquisitions of Koch and Intex referenced above.

During the year ended December 30, 2023, our revolver repayments, net of draws, used cash of $72.0 million as part of the Company's initiative to pay down the term loan.

Our revolver draws, net of repayments, used cash of $26.0 million in the year ended December 27, 2025 primarily used to fund the additional tariff costs in the current year.

During the year ended December 28, 2024, our revolver repayments, net of draws, provided cash of $62.0 million as part of the Company's initiative to pay down the term loan along with the acquisitions of Koch and Intex.

Treasury Stock:

In the year ended December 27, 2025, the Company repurchased $12.4 million of its common stock, see Note 10 - Equity and Accumulated Other Comprehensive Loss of the Notes to Consolidated Financial Statements for additional information.

Stock Option Exercises:

30 | December 28, 2024 Form 10-K

In the years ended December 27, 2025, December 28, 2024, and December 30, 2023, the Company received $1.2 million, $9.7 million, and $2.2 million, respectively, from the exercise of stock options.

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Our material cash requirements for known contractual obligations include, debt, and lease obligations, each of which are discussed in more detail earlier in this section and in the footnotes to consolidated financial statements, along with capital expenditures.

We expect to spend $90 million for capital expenditures in 2025.

Our future investments will depend primarily on the builds of new key duplicating kiosks and machines, merchandising racks, and IT projects that we undertake and the timing of these expenditures.

Our future investments

30 | December 27, 2025 Form 10-K

will depend primarily on the builds of new key duplicating kiosks and machines, merchandising racks, and IT projects that we undertake and the timing of these expenditures.

We also have cash requirements for purchase orders and contracts for the purchase of inventory and other goods and services, which are based on current distribution needs and are fulfilled by our suppliers within the short term.

Our working capital (current assets minus current liabilities) position of $319.5 million as of December 28, 2024 represents a decrease of $5.4 million from the December 30, 2023 level of $324.9 million.

Our working capital (current assets minus current liabilities) position of $388.9 million as of December 27, 2025 represents an increase of $69.4 million from the December 28, 2024 level of $319.5 million driven primarily by the impact of tariff costs and related increases in receivables driven by increased prices.

We expect to generate sufficient operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so.

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Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test and instead requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount.

31 | December 28, 2024 Form 10-K

carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

If, after assessing the totality of events or circumstances, we determine that the fair value of a reporting unit is less than the carrying value, then we would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

Our annual impairment assessment is performed for the reporting units as of October 1.

In 2024, 2023, and 2022, with the assistance of an independent third-party specialist, management assessed the value of our reporting units based on a discounted cash flow model and multiple of earnings.

In 2025, 2024, and 2023, with the assistance of an independent third-party specialist, management assessed the value of our reporting units based on a based on a discounted cash flow model and a guideline public company method.

Assumptions critical to our fair value estimates under the discounted cash flow model include the projected net sales and EBITDA growth rates and the discount rates.

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Significant assumptions used in the determination of the estimated fair values of the reporting units are the projected net sales and EBITDA growth rates and the discount rate.

The projected net sales and EBITDA growth rates are dependent on overall market growth rates, the competitive environment, inflation and our ability to pass price increase along to our customers, relative currency exchange rates, and business activities that impact market share.

31 | December 27, 2025 Form 10-K

As a result, the growth rate could be adversely impacted by a sustained deceleration in category growth, devaluation of the U.S.

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Our discount rate may be impacted in the future by adverse changes in the macroeconomic environment and volatility in the equity and debt markets.

While management can and has implemented strategies to address these events, changes in operating plans or adverse changes in the future could reduce the underlying cash flows used to estimate fair values and could result in a decline in fair value that would trigger future impairment charges of the Protective Solutions and Hardware Solutions reporting units' goodwill.

As of December 28, 2024, the carrying value of the Protective Solutions reporting unit’s goodwill was $128.8 million and Hardware Solutions reporting unit's goodwill was $436.8 million.

As of December 27, 2025, the carrying value of our largest reporting unit, Hardware Solutions, goodwill was $450.9 million.

Recent Accounting Pronouncements:

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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 7. Management’s Discussion and Analysis