Hillman Solutions Corp. 10-K

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE Page Report of Management on Internal Control Over Financial Reporting 34 Report of Independent Registered Public Accounting Firm - Deloitte & Touche LLP 35 Consolidated Financial Statements: Consolidated Balance Sheets 37 Consolidated Statements of Comprehensive Income (Loss ) 38 Consolidated Statements of Cash Flows 39 Consolidated Statements of Stockholders' Equity 40 Notes to Consolidated Financial Statements 41 Financial Statement Schedule: Valuation Accounts 72 33 | December 27, 2025 Form 10-K Report of Management on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Hillman Solutions Corp. and its consolidated subsidiaries; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of Hillman Solutions Corp. and its consolidated subsidiaries are being made only in accordance with authorizations of management and directors of Hillman Solutions Corp. and its consolidated subsidiaries, as appropriate; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Hillman Solutions Corp. and its consolidated subsidiaries that could have a material effect on the consolidated financial statements. Our management, with the participation of our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 27, 2025, the end of our fiscal year. Management based its assessment on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment. This assessment is supported by testing and monitoring performed under the direction of management. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even an effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation. Based on its assessment, our management has concluded that our internal control over financial reporting was effective, as of December 27, 2025, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States. We reviewed the results of management's assessment with the Audit Committee of Hillman Solutions Corp. /s/ JON MICHAEL ADINOLFI /s/ ROBERT O. KRAFT Jon Michael Adinolfi Robert O. Kraft President and Chief Executive Officer Chief Financial Officer Dated: February 17, 2026 Dated: February 17, 2026 34 | December 27, 2025 Form 10-K REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Hillman Solutions Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Hillman Solutions Corp. and subsidiaries (the "Company") as of December 27, 2025 and December 28, 2024, the related consolidated statements of comprehensive income (loss), cash flows, and stockholders' equity, for each of the three years in the period ended December 27, 2025, and the related notes and the financial statement schedule II - Valuation Accounts (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 27, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 27, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 17, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill – Hardware Solutions Reporting Unit – Refer to Note 2 to the Financial Statements Critical Audit Matter Description The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to their respective carrying values. The Company used both a discounted cash flow model and a guideline public company method to estimate the fair value of the Hardware Solutions (“HS”) reporting unit. The discounted cash flow model requires management to make significant estimates and assumptions including projected net sales and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) growth rates and the discount rate. The guideline public company method requires the use of market price data of guideline public companies to estimate the fair value of the reporting unit. Changes in these assumptions could have a significant impact on either the fair value of the 35 | December 27, 2025 Form 10-K reporting unit, the amount of any goodwill impairment charge, or both. The Company’s consolidated goodwill balance was $830.7 million as of December 27, 2025, of which $450.9 million was allocated to the HS reporting unit. The estimated fair value of the HS reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized. We identified the Company’s valuation of goodwill for the HS reporting unit as a critical audit matter because of the significant judgments made by management to estimate the fair value of this reporting unit. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of certain of management’s estimates and assumptions, particularly related to projected net sales and EBITDA growth rates as well as the selection of the discount rate. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the estimates of projected net sales and EBITDA growth rates and the selection of the discount rate used by management to estimate the fair value of the HS reporting unit included the following, among others: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Hardware Solutions reporting unit, such as controls related to management’s forecasts of projected net sales and EBITDA growth rates and selection of the discount rate. • We evaluated management’s ability to accurately forecast projected net sales and EBITDA growth rates by comparing actual results to management’s historical forecasts. • We performed a sensitivity analysis of the projected net sales and EBITDA growth rates and selected discount rate, which included their impact on cash flows. • We evaluated the reasonableness of management’s projected net sales and EBITDA growth rates by comparing the forecasts to (1) historical net sales and EBITDA growth rates, (2) underlying analysis detailing business strategies and growth plans, (3) internal communications to management and the Board of Directors, and (4) industry reports for the Company and certain of its peer companies. • With the assistance of our internal fair value specialists, we evaluated the reasonableness of the valuation methodologies utilized, along with the discount rate and long-term net sales growth rate selected by: ◦ Testing the source information underlying the determination of the discount rate and long-term net sales growth rate, including the mathematical accuracy of the calculation. ◦ Developing a range of independent estimates for the discount rate and compared it to the rate selected by management. ◦ Utilizing industry and market-specific growth trends to assess the reasonableness of the long-term net sales growth rate selected by management. /s/ DELOITTE & TOUCHE LLP Cincinnati, Ohio February 17, 2026 We have served as the Company's auditor since 2022. 36 | December 27, 2025 Form 10-K HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) December 27, 2025 December 28, 2024 ASSETS Current assets: Cash and cash equivalents $ 27,276 $ 44,510 Accounts receivable, net of allowances of $ 1,944 ($ 2,827 - 2024) 114,926 109,788 Inventories, net 485,938 403,673 Other current assets 18,342 15,213 Total current assets 646,482 573,184 Property and equipment, net of accumulated depreciation of $ 428,726 ($ 376,150 - 2024) 231,482 224,174 Goodwill 830,747 828,553 Other intangibles, net of accumulated amortization of $ 592,748 ($ 530,398 - 2024) 546,171 605,859 Operating lease right of use assets 75,152 81,708 Other assets 26,160 17,025 Total assets $ 2,356,194 $ 2,330,503 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 141,662 $ 139,057 Current portion of debt and finance lease obligations 14,830 12,975 Current portion of operating lease liabilities 17,947 16,850 Accrued expenses: Salaries and wages 35,790 34,977 Pricing allowances 8,098 7,651 Income and other taxes 9,466 10,377 Other accrued expenses 29,766 31,843 Total current liabilities 257,559 253,730 Long-term debt 668,337 691,726 Deferred tax liabilities 131,870 124,611 Operating lease liabilities 63,459 71,474 Other non-current liabilities 6,462 6,591 Total liabilities 1,127,687 1,148,132 Commitments and Contingencies (Note 15) — — Stockholders' equity: Common stock, 0.0001 par, 500,000,000 shares authorized, 197,857,100 and 196,487,532 issued and outstanding at December 27, 2025, respectively and 196,705,710 issued and outstanding at December 28, 2024 20 20 Treasury stock, at cost, 1,369,568 shares at December 27, 2025 ( 12,423 ) — Additional paid-in capital 1,457,422 1,442,958 Accumulated deficit ( 178,646 ) ( 218,951 ) Accumulated other comprehensive loss ( 37,866 ) ( 41,656 ) Total stockholders' equity 1,228,507 1,182,371 Total liabilities and stockholders' equity $ 2,356,194 $ 2,330,503 The Notes to Consolidated Financial Statements are an integral part of these statements. 37 | December 27, 2025 Form 10-K HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE Income (LOSS) (dollars in thousands) Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Net sales $ 1,552,224 $ 1,472,595 $ 1,476,477 Cost of sales (exclusive of depreciation and amortization shown separately below) 795,875 764,691 828,956 Selling, warehouse, and general and administrative expenses 502,000 488,702 452,110 Depreciation 79,870 68,766 59,331 Amortization 61,232 61,274 62,309 Other (income) expense, net ( 722 ) 361 12,843 Income from operations 113,969 88,801 60,928 Interest expense, net 56,467 59,241 68,310 Refinancing costs 906 3,008 — Income (loss) before income taxes 56,596 26,552 ( 7,382 ) Income tax expense 16,291 9,297 2,207 Net income (loss) $ 40,305 $ 17,255 $ ( 9,589 ) Basic income (loss) per share $ 0.20 $ 0.09 $ ( 0.05 ) Weighted average basic shares outstanding 197,451 196,108 194,722 Diluted income (loss) per share $ 0.20 $ 0.09 $ ( 0.05 ) Weighted average diluted shares outstanding 199,480 198,915 194,722 Net income (loss) from above $ 40,305 $ 17,255 $ ( 9,589 ) Other comprehensive income (loss): Foreign currency translation adjustments 6,796 ( 16,471 ) 4,801 Hedging activity ( 3,006 ) 2,635 ( 11,597 ) Total other comprehensive income (loss) 3,790 ( 13,836 ) ( 6,796 ) Comprehensive income (loss) $ 44,095 $ 3,419 $ ( 16,385 ) The Notes to Consolidated Financial Statements are an integral part of these statements. 38 | December 27, 2025 Form 10-K HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Cash flows from operating activities: Net income (loss) $ 40,305 $ 17,255 $ ( 9,589 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 141,102 130,040 121,640 Loss (gain) on dispositions of property and equipment 73 56 ( 34 ) Impairment charges — — 24,600 Deferred income taxes 4,717 ( 5,038 ) ( 8,693 ) Deferred financing and original issue discount amortization 5,021 5,065 5,323 Loss on debt restructuring 906 3,008 — Cash paid to third parties in connection with debt restructuring ( 906 ) ( 1,554 ) — Stock-based compensation expense 14,246 13,463 12,004 Customer bankruptcy reserve — 8,640 — Change in fair value of contingent consideration ( 240 ) 228 ( 4,936 ) Changes in operating items: Accounts receivable ( 4,121 ) ( 4,545 ) ( 15,898 ) Inventories ( 79,432 ) 8,710 103,660 Other assets ( 14,980 ) ( 6,004 ) 3,068 Accounts payable 1,689 ( 7,784 ) 8,029 Accrued salaries and wages 711 12,707 6,750 Other accrued liabilities ( 3,906 ) 9,089 ( 7,889 ) Net cash provided by operating activities 105,185 183,336 238,035 Cash flows from investing activities: Acquisitions of businesses, net of cash acquired — ( 57,900 ) ( 1,700 ) Capital expenditures ( 70,100 ) ( 85,219 ) ( 65,769 ) Other investing activities ( 251 ) ( 278 ) ( 383 ) Net cash used for investing activities ( 70,351 ) ( 143,397 ) ( 67,852 ) Cash flows from financing activities: Repayments of senior term loans ( 8,512 ) ( 106,383 ) ( 88,510 ) Borrowings of revolving credit loans 131,000 177,000 178,000 Repayments of revolving credit loans ( 157,000 ) ( 115,000 ) ( 250,000 ) Repurchases of common stock ( 12,423 ) — — Financing fees — ( 33 ) — Principal payments under finance lease obligations ( 5,683 ) ( 3,682 ) ( 2,410 ) Proceeds from exercise of stock options 1,207 9,657 2,167 Payments of contingent consideration ( 265 ) ( 260 ) ( 1,232 ) Other financing activities ( 544 ) ( 567 ) 9 Net cash used for financing activities ( 52,220 ) ( 39,268 ) ( 161,976 ) Effect of exchange rate changes on cash 152 5,286 ( 735 ) Net (decrease) increase in cash and cash equivalents ( 17,234 ) 5,957 7,472 Cash and cash equivalents at beginning of period 44,510 38,553 31,081 Cash and cash equivalents at end of period $ 27,276 $ 44,510 $ 38,553 The Notes to Consolidated Financial Statements are an integral part of these statements. 39 | December 27, 2025 Form 10-K HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (dollars in thousands) Common Stock Amount Treasury Stock Amount Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity December 31, 2022 $ 20 $ — $ 1,404,360 $ ( 226,617 ) $ ( 21,024 ) $ 1,156,739 Net loss — — ( 9,589 ) — ( 9,589 ) Stock option activity, stock awards and employee stock purchase plan — 14,175 — — 14,175 Hedging activity — — — — ( 11,597 ) ( 11,597 ) Change in cumulative foreign currency translation adjustment — — — — 4,801 4,801 December 30, 2023 $ 20 $ — $ 1,418,535 $ ( 236,206 ) $ ( 27,820 ) $ 1,154,529 Net income — — — 17,255 — 17,255 Stock option activity, stock awards and employee stock purchase plan — — 24,423 — — 24,423 Hedging activity — — — — 2,635 2,635 Change in cumulative foreign currency translation adjustment — — — — ( 16,471 ) ( 16,471 ) December 28, 2024 $ 20 $ — $ 1,442,958 $ ( 218,951 ) $ ( 41,656 ) $ 1,182,371 Net income — — — 40,305 — 40,305 Stock option activity, stock awards and employee stock purchase plan — — 14,464 — — 14,464 Repurchases of common stock — ( 12,423 ) — — — ( 12,423 ) Hedging activity — — — — ( 3,006 ) ( 3,006 ) Change in cumulative foreign currency translation adjustment — — — — 6,796 6,796 Balance at December 27, 2025 $ 20 $ ( 12,423 ) $ 1,457,422 $ ( 178,646 ) $ ( 37,866 ) $ 1,228,507 The Notes to Consolidated Financial Statements are an integral part of these statements. 40 | December 27, 2025 Form 10-K 1. BASIS OF PRESENTATION The accompanying financial statements include the consolidated accounts of Hillman Solutions Corp. and its wholly-owned subsidiaries (collectively “Hillman” or the “Company”). Unless the context requires otherwise, references to "Hillman," "we," "us," "our," or "our Company" refer to Hillman Solutions Corp. and its wholly-owned subsidiaries. The Consolidated Financial Statements included herein have been prepared in accordance with accounting standards generally accepted in the United States of America ("U.S. GAAP"). All intercompany balances and transactions have been eliminated. References to 2025, 2024, and 2023 are for fiscal years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. Certain amounts in the prior year presentation were reclassified to conform to the current year’s presentation. "Hillman Solutions Corp.," "HMan Group Holdings Inc.," and "The Hillman Companies, Inc." are holding companies with no other operations, cash flows, material assets or liabilities other than the equity interests in "The Hillman Group, Inc.," which is the borrower under our credit facility. The Company has a 52-53 week fiscal year ending on the last Saturday in December. In a 52 week fiscal year, each of the Company’s quarterly periods will consist of 13 weeks. The additional week in a 53 week fiscal year is added to the fourth quarter, making such quarter consist of 14 weeks. In 2025, 2024 and 2023, the Company had a 52 week fiscal year. Nature of Operations: The Company is comprised of three separate operating business segments: (1) Hardware and Protective Solutions, (2) Robotics and Digital Solutions, and (3) Canada. 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 and managed by that leadership team. See Note 18 - Segment Reporting and Geographic Information for additional information. Hillman provides and, on a limited basis, produces products such as fasteners and related hardware items; threaded rod and metal shapes; keys, key duplication systems, and accessories; personal protective equipment such as gloves and eye-wear; rope and chain; builder's hardware; 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. The Canada segment also produces fasteners, stampings, fittings, and processes threaded parts for automotive suppliers, industrial Original Equipment Manufacturers (“OEMs”), and industrial distributors. Reclassifications: Due to the segment realignment mentioned above, certain amounts in the prior year Consolidated Financial Statements and in the Notes to the Consolidated Financial Statements were reclassified to conform to the current year’s presentation. This had no impact on the prior periods’ consolidated balance sheets, consolidated statements of comprehensive income (loss), consolidated statements of cash flows, or consolidated statements of stockholders' equity. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents: Cash and cash equivalents consist of commercial paper, U.S. Treasury obligations, and other liquid securities purchased with initial maturities less than 90 days and are stated at cost which approximates fair value. The Company has foreign bank balances of approximately $ 13,492 and $ 25,647 at December 27, 2025 and December 28, 2024, respectively. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances. Restricted Investments: The Company's restricted investments are trading securities carried at fair market value which represent assets held in a Rabbi Trust to fund deferred compensation liabilities owed to the Company's employees. The current 41 | December 27, 2025 Form 10-K portion of the investments is included in other current assets and the long term portion in other assets on the accompanying Consolidated Balance Sheets. See Note 9 - Deferred Compensation Plan for additional information. Accounts Receivable and Allowance for Doubtful Accounts: The Company establishes the allowance for doubtful accounts by considering historical losses, adjusted to take into account current market conditions. The estimates for calculating the aggregate reserve are based on the financial condition of the customers, the length of time receivables are past due, historical collection experience, current economic trends, and reasonably supported forecasts. Increases to the allowance for doubtful accounts result in a corresponding expense. The Company writes off individual accounts receivable when collection becomes improbable. The allowance for doubtful accounts was $ 1,944 and $ 2,827 as of December 27, 2025 and December 28, 2024, respectively. In the years ended December 27, 2025 and December 28, 2024, the Company entered into agreements to sell, on an ongoing basis and without recourse, certain trade accounts receivable. The buyer is responsible for servicing the receivables. The sale of the receivables is accounted for in accordance with Financial Accounting Standards Board (“FASB”) ASC 860, Transfers and Servicing. Under that guidance, receivables are considered sold when they are transferred beyond the reach of the Company and its creditors, the purchaser has the right to pledge or exchange the receivables, and the Company has surrendered control over the transferred receivables. The Company has received proceeds from the sales of trade accounts receivable of approximately $ 309,860 , $ 286,243 and $ 299,169 for the years ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively, and has included the proceeds in net cash provided by operating activities in the Consolidated Statements of Cash Flows. Related to the sale of accounts receivable, the Company recorded losses of approximately $ 5,574 , $ 5,840 and $ 6,313 for the years ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively. Inventories: Inventories consisting predominantly of finished goods are valued at the lower of cost or net realizable value, cost being determined principally on the standard cost method, which approximates the first-in-first-out “FIFO” method. The historical usage rate is the primary factor used in assessing the net realizable value of excess and obsolete inventory. A reduction in the carrying value of an inventory item from cost to net realizable value is recorded for inventory with excess on-hand quantities as determined based on historic and projected sales, product category, and stage in the product life cycle. Property and Equipment: Property and equipment are carried at cost and include expenditures for new facilities and major renewals. For financial accounting purposes, depreciation is computed on the straight-line method over the estimated useful lives of the assets, generally 3 to 10 years. Assets acquired under finance leases are depreciated over the terms of the related leases. Maintenance and repairs are charged to expense as incurred. The Company capitalizes certain costs that are directly associated with the development of internally developed software related to our key and engraving machines, representing the historical cost of these assets. Once the software is completed and placed into service, such costs are amortized over the estimated useful lives. The Company includes components used in the assembly of key and engraving kiosks as machinery and equipment due to the shorter term nature of these builds, and such totaled $ 24,890 as of December 27, 2025. The Company’s construction in process includes projects that are typically longer term in nature. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective accounts, and the resulting gain or loss is reflected in income from operations. 42 | December 27, 2025 Form 10-K Property and equipment, net, consists of the following at December 27, 2025 and December 28, 2024: Estimated Useful Life (Years) 2025 2024 Leasehold improvements life of lease $ 31,111 $ 29,145 Machinery and equipment 3 - 10 536,432 481,418 Computer equipment and software 3 - 5 74,669 73,203 Furniture and fixtures 6 - 8 13,210 12,506 Construction in process 4,786 4,052 Property and equipment, gross 660,208 600,324 Less: Accumulated depreciation 428,726 376,150 Property and equipment, net $ 231,482 $ 224,174 Goodwill: The Company has adopted ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): 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. If, after assessing the totality of events or circumstances, the Company determines that the fair value of a reporting unit is less than the carrying value, then the Company 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. The Company’s annual impairment assessment is performed for its reporting units as of October 1st. With the assistance of an independent third-party specialist, management assessed the value the of the reporting units based on a discounted cash flow model and multiple of earnings. Assumptions critical to our fair value estimates under the discounted cash flow model include the discount rate and projected net sales and EBITDA growth rates. The results of the quantitative assessment in 2025, 2024, and 2023 indicated that the fair value of each reporting unit was in excess of its carrying value. Therefore goodwill was not impaired as of our annual testing dates. Goodwill amounts by reportable segment are summarized as follows: Goodwill at Goodwill at December 28, 2024 Acquisitions Disposals Other (1) December 27, 2025 Hardware and Protective Solutions $ 581,187 $ 309 $ — $ 11,031 $ 592,527 Robotics and Digital Solutions 220,936 — — ( 10,580 ) 210,356 Canada 26,430 — — 1,434 27,864 Total $ 828,553 $ 309 $ — $ 1,885 $ 830,747 (1) The "Other" change to goodwill relates to adjustments resulting from fluctuations in foreign currency exchange rates for the Canada, Hardware Solutions, and Protective Solutions reporting units. "Other" also includes a reallocation of $10,580 of goodwill from our Robotics and Digital Solutions reporting unit to our Hardware Solutions reporting unit in connection with the segment realignment - see Note 18 - Segment Reporting and Geographic Information for additional information. Intangible Assets: Intangible assets arise primarily from the determination of their respective fair market values at the date of acquisition. With the exception of certain trade names, intangible assets are amortized on a straight-line basis over periods ranging from 2 to 20 years, representing the period over which the Company expects to receive future economic benefits from these assets. Other intangibles, net, as of December 27, 2025 and December 28, 2024 consist of the following: 43 | December 27, 2025 Form 10-K Useful Life (Years) December 27, 2025 December 28, 2024 Customer relationships 9 - 20 $ 956,880 $ 954,888 Trademarks - indefinite Indefinite 85,274 84,883 Trademarks - other 2 - 15 29,549 29,549 Technology and patents 5 - 12 67,216 66,937 Intangible assets, gross 1,138,919 1,136,257 Less: Accumulated amortization 592,748 530,398 Intangible assets, net $ 546,171 $ 605,859 Estimated annual amortization expense for intangible assets subject to amortization at December 27, 2025 for the next five fiscal years is as follows: Fiscal Year Ended Amortization Expense 2026 $ 56,473 2027 53,635 2028 52,867 2029 51,953 2030 51,767 Thereafter 194,202 The Company also evaluates indefinite-lived intangible assets (primarily trademarks and trade names) for impairment annually or more frequently if events and circumstances indicate that it is more likely than not that the fair value of an indefinite-lived intangible asset is below its carrying amount. With the assistance of an independent third-party specialist, management assessed the fair value of our indefinite-lived intangible assets based on a relief from royalties model. An impairment charge is recorded if the carrying amount of an indefinite-lived intangible asset exceeds the estimated fair value on the measurement date as of October 1st. No impairment charges related to indefinite-lived intangible assets were recorded by the Company in 2025, 2024, or 2023 as a result of the quantitative annual impairment test. Long-Lived Assets: Long-lived assets, such as property and equipment and definite-lived intangible assets, are reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by the asset or asset group to its carrying value. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. During fiscal 2023, the Company performed an impairment assessment on certain intangible assets. In the fourth quarter of 2023, we evaluated a specific product line and decided to exit certain retail locations and markets, which reduced the future cash flows from this product line and impacted the lower of cost or net realizable value of inventory. As a result, the Company recognized an impairment charge of $ 19.6 million during the fourth quarter of 2023 to write down the carrying values of intangible assets to their fair value. The Impairment charge was split between the following asset categories: $ 15.6 million for customer relationships, $ 2.2 million for technology and patents, and $ 1.7 million for trademarks - other. The impairment charge is included in other expense (income), net in the accompanying consolidated statements of comprehensive income (loss). No other impairment charges were recorded in 2025, 2024, or 2023. Approximately 96 % of the Company’s long-lived assets are held within the United States. Income Taxes: Deferred income taxes are computed using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the financial reporting basis and income tax basis of assets and liabilities, based on enacted tax laws and statutory tax rates applicable to the periods in which the 44 | December 27, 2025 Form 10-K temporary differences are expected to reverse. Valuation allowances are provided for tax benefits where management estimates it is more likely than not that certain tax benefits will not be realized. Adjustments to valuation allowances are recorded for changes in utilization of the tax-related item. See Note 6 - Income Taxes for additional information. In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. We adopted this ASU on a prospective basis effective December 29, 2024. Refer to Note 6 - Income Taxes for the inclusion of new disclosures required. In accordance with guidance regarding the accounting for uncertainty in income taxes, the Company recognizes a tax position if, based solely on its technical merits, it is more likely than not to be sustained upon examination by the relevant taxing authority. If a tax position does not meet the more likely than not recognition threshold, the Company does not recognize the benefit of that position in its Consolidated Financial Statements. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to be recognized in the Consolidated Financial Statements. Interest and penalties related to income taxes are included in income tax expense for income taxes. Contingent Consideration: Contingent consideration relates to the potential payment for an acquisition that is contingent upon the achievement of the acquired business meeting certain product development milestones and/or certain financial performance milestones. The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred. The estimated fair value of the contingent consideration was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting payments. The resulting value captures the risk associated with the form of the payout structure. The risk neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The assumptions utilized in the calculation based on financial performance milestones include projected revenue, volatility and discount rates. For potential payments related to product development milestones, we estimated the fair value based on the probability of achievement of such milestones. The assumptions utilized in the calculation of the acquisition date fair value include probability of success and the discount rates. Contingent consideration involves certain assumptions requiring significant judgment and actual results may differ from assumed and estimated amounts. Risk Insurance Reserves: The Company self-insures our general liability including products liability, automotive liability, and workers' compensation losses up to $ 500 per occurrence. Our policy is to estimate reserves based upon a number of factors, including known claims, estimated incurred but not reported claims, and third-party actuarial analysis. The third-party actuarial analysis is based on historical information along with certain assumptions about future events. These reserves are classified as other current and other long-term liabilities within the balance sheets. The Company self-insures our group health claims up to an annual stop loss limit of $ 300 per participant. Historical group insurance loss experience forms the basis for the recognition of group health insurance reserves. Retirement Benefits: Certain employees of the Company are covered under a profit-sharing and retirement savings plan. The plan provides for a matching contribution for eligible employees of 50 % of each dollar contributed by the employee up to 6 % of the employee's compensation. In addition, the plan allows for an optional annual contribution in amounts authorized by the Board of Directors, subject to the terms and conditions of the plan. Hillman Canada sponsors a Deferred Profit Sharing Plan (“DPSP”) and a Group Registered Retirement Savings Plan (“RRSP”) for all qualified, full-time employees, with at least three months of continuous service. DPSP is an employer-sponsored profit sharing plan registered as a trust with the Canada Revenue Agency (“CRA”). Employees do not contribute to the DPSP. There is no minimum required contribution; however, DPSPs are subject to maximum contribution limits set by the CRA. The DPSP is offered in conjunction with a RRSP. All eligible employees may contribute an additional voluntary amount of up to eight percent of the employee's gross earnings. Hillman Canada is required to match 100 % of all employee contributions up to 2 % of the employee's compensation into the DPSP account. The assets of the RRSP are held separately from those of Hillman Canada in independently administered funds. 45 | December 27, 2025 Form 10-K Retirement benefit costs were $ 5,121 , $ 4,832 , and $ 4,315 in the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively . Revenue Recognition: Revenue is recognized when control of goods or services is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. The Company offers a variety of sales incentives to its customers primarily in the form of discounts and rebates. Discounts are recognized in the Consolidated Financial Statements at the date of the related sale. Rebates are based on the revenue to date and the contractual rebate percentage to be paid. A portion of the cost of the rebate is allocated to each underlying sales transaction. Discounts and rebates are included in the determination of net sales. The Company also establishes a reserve for customer returns and allowances. The reserve is established based on historical rates of returns and allowances. The reserve is adjusted quarterly based on actual experience. Discounts and allowances are included in the determination of net sales. The following table disaggregates our revenue by product category. Certain amounts in the prior year presentation between segments were reclassified to conform to the current year’s presentation. Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue Year Ended December 27, 2025 Fastening and Hardware $ 928,445 $ — $ 122,916 $ 1,051,361 Personal Protective 265,512 — 5,425 270,937 Keys and Key Fobs — 179,215 9,739 188,954 Engraving and Resharp — 40,942 30 40,972 Consolidated $ 1,193,957 $ 220,157 $ 138,110 $ 1,552,224 Year Ended December 28, 2024 Fastening and Hardware $ 882,515 $ — $ 133,968 $ 1,016,483 Personal Protective 225,478 — 4,447 229,925 Keys and Key Fobs — 168,637 9,446 178,083 Engraving and Resharp — 48,064 40 48,104 Consolidated $ 1,107,993 $ 216,701 $ 147,901 $ 1,472,595 Year Ended December 30, 2023 Fastening and Hardware $ 881,066 $ — $ 140,737 $ 1,021,803 Personal Protective 209,407 — 6,996 216,403 Keys and Key Fobs — 177,358 8,673 186,031 Engraving and Resharp — 52,188 52 52,240 Consolidated $ 1,090,473 $ 229,546 $ 156,458 $ 1,476,477 The following table disaggregates our revenue by geographic location: 46 | December 27, 2025 Form 10-K Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue Year Ended December 27, 2025 United States $ 1,178,868 $ 220,157 $ — $ 1,399,025 Canada — — 138,110 138,110 Mexico 15,089 — — 15,089 Consolidated $ 1,193,957 $ 220,157 $ 138,110 $ 1,552,224 Year Ended December 28, 2024 United States $ 1,090,218 $ 216,701 $ — $ 1,306,919 Canada — — 147,901 147,901 Mexico 17,775 — — 17,775 Consolidated $ 1,107,993 $ 216,701 $ 147,901 $ 1,472,595 Year Ended December 30, 2023 United States $ 1,077,899 $ 229,546 $ — $ 1,307,445 Canada — — 156,458 156,458 Mexico 12,574 — — 12,574 Consolidated $ 1,090,473 $ 229,546 $ 156,458 $ 1,476,477 Our revenue by geography is allocated based on the location of our sales operations. Hardware and Protective Solutions revenues consist primarily of the delivery of fasteners, anchors, specialty fastening products, rope and chain, 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. 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. The Company’s performance obligations under its arrangements with customers are providing products, in-store merchandising services, and access to key duplicating and engraving equipment. Generally, the price of the merchandising services and the access to the key duplicating and engraving equipment is included in the price of the related products. Control of products is transferred at the point in time when the customer accepts the goods, which occurs upon delivery of the products. Judgment is required in determining the time at which to recognize revenue for the in-store services and the access to key duplicating and engraving equipment. Revenue is recognized for in-store service and access to key duplicating and engraving equipment as the related products are delivered, which approximates a time-based recognition pattern. Therefore, the entire amount of consideration related to the sale of products, in-store merchandising services, and access to key duplicating and engraving equipment is recognized upon the delivery of the products. The costs to obtain a contract are insignificant, and generally contract terms do not extend beyond one year. Therefore, these costs are expensed as incurred. Freight and shipping costs and the cost of our in-store merchandising services teams are recognized in selling, warehouse, general, and administrative expense when control over products is transferred to the customer. The Company used the practical expedient regarding the existence of a significant financing component as payments are due in less than one year after delivery of the products. 47 | December 27, 2025 Form 10-K Shipping and Handling: The costs incurred to ship product to customers, including freight and handling expenses, are included in selling, warehouse, general, and administrative (“SG&A”) expenses on the Company's Consolidated Statements of Comprehensive Income (Loss). Shipping and handling costs were $ 55,038 , $ 53,438 , and $ 53,288 in the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. Research and Development: The Company expenses research and development costs, which are included in selling, warehouse, general, and administrative (“SG&A”) expenses on the Company's Consolidated Statements of Comprehensive Income (Loss) consisting primarily of internal wages and benefits in connection with improvements to the fastening products along with the key duplicating and engraving machines. The Company's research and development costs were $ 1,358 , $ 1,333 , and $ 2,562 in the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. Stock-Based Compensation: 2021 Employee Stock Purchase Plan Our Employee Stock Purchase Plan ("ESPP") became effective on July 14, 2021. A total of 2,140,754 shares of common stock are available for issuance under the ESPP. Under the ESPP, eligible employees are granted options to purchase shares of common stock at 85% of the fair market value at the time of exercise. The option period commences on the first payroll date in January, April, July, and October of each year and ends approximately three months later on the last business day in March, June, September or December. No employee may be granted an option under the Plan if, immediately after the option is granted, the employee would own stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company. 2021 Equity Incentive Plan Effective July 14, 2021, the Company established the 2021 Equity Incentive Plan. Under the 2021 Equity Incentive Plan, the Company may grant options, stock appreciation rights, restricted stock, and other stock-based awards. Hillman reflects the options granted in accordance with Accounting Standards Codification 718, Compensation - Stock Compensation ("ASC 718"). The Company uses a Black-Scholes option pricing model to determine the fair value of stock options on the dates of grant. The Black-Scholes pricing model requires various assumptions, including expected term, which is based on our historical experience and expected volatility which is estimated based on the average historical volatility of similar entities with publicly traded shares. The Company also makes assumptions regarding the risk-free interest rate and the expected dividend yield. The risk-free interest rate is based on the U.S. Treasury interest rate whose term is consistent with the expected term of the share-based award. The dividend yield on our common stock is assumed to be zero since we do not pay dividends and have no current plans to do so in the future. Determining the fair value of stock options at the grant date requires judgment, including estimates for the expected life of the share-based award, stock price volatility, dividend yield, and interest rate. These assumptions may differ significantly between grant dates because of changes in the actual results of these inputs that occur over time. HMAN Group Holdings Inc. 2014 Equity Incentive Plan Prior to 2021, the Company had a stock-based employee compensation plan pursuant to which the Company granted options, stock appreciation rights, restricted stock, and other stock-based awards. Hillman reflects the options granted in its stand-alone Consolidated Financial Statements in accordance with Accounting Standards Codification 718, Compensation — Stock Compensation (“ASC 718”). The Company used a Black-Scholes option pricing model to determine the fair value of stock options on the dates of grant. The Black-Scholes pricing model requires various assumptions, including expected term, which is based on our historical experience and expected volatility which is estimated based on the average historical volatility of similar entities. The Company also made assumptions regarding the risk-free interest rate and the expected dividend yield. The risk-free interest rate is based on the U.S. Treasury interest rate whose term is consistent with the expected term of the share-based award. The dividend yield on our common stock is assumed to be zero since we have not historically paid dividends on these awards and have no current plans to do so in the future. Determining the fair value of stock options at the grant date requires judgment, including estimates for the expected life of the share-based award, stock price volatility, dividend yield, and interest rate. These assumptions may differ significantly between grant dates because of changes in the actual results of these inputs that occur over time. 48 | December 27, 2025 Form 10-K Stock-based compensation expense is recognized using a fair value based recognition method. Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite vesting period or performance period of the award on a straight-line basis. The stock-based compensation expense is recorded in selling, warehouse, general and administrative expenses. The plans are more fully described in Note 11 - Stock-Based Compensation. Fair Value of Financial Instruments: The Company uses the accounting guidance that applies to all assets and liabilities that are being measured and reported on a fair value basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. Whenever possible, quoted prices in active markets are used to determine the fair value of the Company's financial instruments. Derivatives and Hedging: The Company uses derivative financial instruments to manage its exposures to (1) interest rate fluctuations on its floating rate senior term loan and (2) fluctuations in foreign currency exchange rates. The Company measures those instruments at fair value and recognizes changes in the fair value of derivatives in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. The Company enters into derivative instrument transactions with financial institutions acting as the counter-party. The Company does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes. The relationships between hedging instruments and hedged items are formally documented, in addition to the risk management objective and strategy for each hedge transaction. For interest rate swaps, the notional amounts, rates, and maturities of our interest rate swaps are closely matched to the related terms of hedged debt obligations. The critical terms of the interest rate swap are matched to the critical terms of the underlying hedged item to determine whether the derivatives used for hedging transactions are highly effective in offsetting changes in the cash flows of the underlying hedged item. If it is determined that a derivative ceases to be a highly effective hedge, the hedge accounting is discontinued and all subsequent derivative gains and losses are recognized in the Statement of Comprehensive Income (Loss). Derivative instruments designated in hedging relationships that mitigate exposure to the variability in future cash flows of the variable-rate debt and foreign currency exchange rates are considered cash flow hedges. The Company records all derivative instruments in other assets or other liabilities on the Consolidated Balance Sheets at their fair values. If the derivative is designated as a cash flow hedge and the hedging relationship qualifies for hedge accounting, the effective portion of the change in the fair value of the derivative is recorded in other comprehensive income or loss. The change in fair value for instruments not qualifying for hedge accounting are recognized in the Statement of Comprehensive Income (Loss) in the period of the change. See Note 13 - Derivatives and Hedging for additional information. Share Repurchase Program: On July 31, 2025, the Board of Directors of the Company authorized a share repurchase program of up to $100,000 (the “Repurchase Program”) of the Company's common stock. The Company accounts for the repurchase of its common stock under the cost method. Under this method, the repurchased shares are recorded at their cost as a reduction of stockholders' equity. Upon repurchase, the treasury stock account is debited for the cost paid, and the cash account is credited. When treasury shares are reissued, any excess of the reissuance price over the repurchase cost is credited to additional paid-in capital. If the reissuance price is less than the repurchase cost, the difference is first debited to additional paid-in capital (from previous treasury stock transactions) and then to retained earnings. The Company does not recognize gains or losses from treasury stock transactions in its Consolidated Statement of Comprehensive Income (Loss). See Note 10 - Equity and Accumulated Other Comprehensive Loss for more information . Translation of Foreign Currencies: The translation of the Company's Canadian and Mexican local currency based financial statements into U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average exchange rate during the period. Cumulative translation adjustments are recorded as a component of accumulated other comprehensive income (loss) in stockholders' equity. 49 | December 27, 2025 Form 10-K Use of Estimates in the Preparation of Financial Statements: The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses for the reporting period. Actual results may differ from these estimates. 3. RECENT ACCOUNTING PRONOUNCEMENTS On December 14, 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures. The amendments in this update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The amendments on Income Tax Disclosures are effective for fiscal years beginning after December 15, 2024. We adopted this ASU on a prospective basis effective December 29, 2024. Refer to Note 6 - Income Taxes for the inclusion of new disclosures required. On January 6, 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses, as an amendment to ASU 2024-03. This ASU mandates that public business entities provide detailed disclosures in the notes to their financial statements, breaking down certain expense categories presented on the income statement into specified natural expense components. This enhanced disclosure aims to provide investors with more detailed information about the types of expenses included in commonly presented expense captions, such as cost of sales, selling, general, and administrative expenses (SG&A), and research and development. The amendments introduced by ASU 2025-01 are effective for public business entities for fiscal years beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 with early adoption permitted. The Company is currently evaluating the impact provided by the new standard. In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05), which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets under Accounting Standards Codification 606, Revenue from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. For public business entities, ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption of ASU 2025-05 is permitted. The Company is currently evaluating the impact provided by the new standard. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for the costs of internal-use software. The amendments remove all references to prescriptive and sequential development stages and, instead, require an entity to start capitalizing software costs when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period with the amendments to be applied using a prospective, modified or retrospective transition approach. The Company is currently evaluating the impact provided by the new standard. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements which is intended to clarify existing requirements without fundamentally altering interim reporting or changing existing disclosure requirements. Key aspects include clarifying that ASC 270 applies to entities providing a full set of GAAP interim financial statements and notes, centralizing a list of all required interim disclosures from other ASC topics within Topic 270, and codifying a principle requiring disclosure of material events and changes since the most recent annual report. The amendments in this update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact provided by the new standard. 4. RELATED PARTY TRANSACTIONS 50 | December 27, 2025 Form 10-K Hillman, Jefferies Financial Group Inc., certain other financial sponsors, certain CCMP affiliated investors and certain Oak Hill affiliated investors entered into the Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”), pursuant to which, among other things, the parties to the A&R Registration Rights Agreement agreed not to effect any sale or distribution of any equity securities of Hillman held by any of them during the lock-up period described therein and were granted certain registration rights with respect to their respective shares of Hillman common stock, in each case, on the terms and subject to the conditions therein. Richard Zannino and Joe Scharfenberger, both partners at CCMP, were members of our Board at the time Hillman entered into the A&R Registration Rights Agreement. Mr. Zannino and Mr. Scharfenberger each resigned from the Hillman Board in May 2023 following CCMP's complete exit of its investment in Hillman during the second quarter of 2023. Another director, Teresa Gendron, was the CFO of Jefferies Financial Group Inc. until March 2023. Sales to related parties, which are included in net sales, consist primarily of the sale of excess inventory to Ollie's Bargain Outlet Holdings, Inc. ("Ollie's"). John Swygert, Executive Chairman of Ollie's since 2025, and before that President and Chief Executive Officer of Ollie's, is a member of our Board of Directors. Sales to related parties were $ 312 , $ 622 , and $ 1,583 for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. In late 2024, the Company signed a contract with Ollie's to place Minute Key and Quick-Tag machines in select Ollie's locations. The Company paid royalties shares to Ollie's as a result of this agreement. The payments to related parties were immaterial in the years ended December 27, 2025 and December 28, 2024, respectively. 5. ACQUISITIONS Ajustlock On December 5, 2023, the Company completed its acquisition of Ajustlock, an innovative adjustable barrel bolt lock used on gates, doors or windows which self-adjusts vertically to eliminate door shift issues, for a total purchase price of $ 1,400 , which includes a $ 100 hold-back payable to the seller due one year after closing. During the fourth quarter of 2024, the remaining hold-back of $54, which reflects the balance owed to Ajustlock after deducting certain amounts owed by Ajustlock to the Company, was paid to satisfy the full purchase price. Ajustlock sells its products throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment and have been determined to be immaterial for purposes of additional disclosure. 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 $ 23,783 . In the second quarter of 2024, the Company had a final net working capital adjustment of $173, which reduced goodwill and the purchase price of the acquisition from an estimated $23,956 at closing in the first quarter of 2024 to $ 23,783 . Koch has business operations throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment. The following table reconciles the fair value of the acquired assets and assumed liabilities to the total purchase price of Koch. Inventory $ 20,194 Other current assets 275 Property and equipment 586 Goodwill 3,048 Customer relationships 4,000 Trade names 300 Total assets acquired $ 28,403 Less: Liabilities assumed ( 4,620 ) Total purchase price $ 23,783 Net sales and operating income from Koch included in the Company's Condensed Consolidated Statement of Comprehensive Income (Loss) for the year ended December 27, 2025 were as follows: 51 | December 27, 2025 Form 10-K Year Ended December 27, 2025 Year Ended December 28, 2024 Net sales $ 47,218 $ 39,888 Operating income 2,791 3,279 Pro forma financial information has not been presented for Koch as the financial results of Koch were insignificant to the financial results of the Company on a standalone basis. 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 $ 34,064 . This acquisition expands Hillman’s offerings in the cleaning products category. Intex has business operations throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment. The following table reconciles the fair value of the acquired assets and assumed liabilities to the total purchase price of Intex. Accounts receivable $ 11,981 Inventory 14,486 Other current assets 26 Property and equipment 949 Goodwill 3,829 Customer relationships 9,400 Trade names 104 Total assets acquired $ 40,775 Less: Liabilities assumed ( 6,711 ) Total purchase price $ 34,064 Net sales and operating income from Intex included in the Company's Condensed Consolidated Statement of Comprehensive Income (Loss) for the year ended December 27, 2025 were as follows: Year Ended December 27, 2025 Year Ended December 28, 2024 Net sales $ 61,586 $ 21,075 Operating income 5,872 2,037 Pro forma financial information has not been presented for Intex as the financial results of Intex were insignificant to the financial results of the Company on a standalone basis. 6. INCOME TAXES Income (loss) before income taxes are comprised of the following components for the periods indicated: Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 United States based operations $ 50,933 $ 18,066 $ ( 17,902 ) Non-United States based operations 5,663 8,486 10,520 Income (loss) before income taxes $ 56,596 $ 26,552 $ ( 7,382 ) 52 | December 27, 2025 Form 10-K Below are the components of the Company's income tax expense for the periods indicated: Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Current: Federal $ 2,152 $ 5,686 $ 1,704 State 4,236 3,507 3,009 Foreign 1,906 3,206 2,642 Total current 8,294 12,399 7,355 Deferred: Federal 9,168 ( 188 ) ( 2,666 ) State ( 395 ) ( 1,737 ) ( 2,393 ) Foreign ( 776 ) ( 1,177 ) ( 38 ) Total deferred 7,997 ( 3,102 ) ( 5,097 ) Valuation allowance — — ( 51 ) Income tax expense $ 16,291 $ 9,297 $ 2,207 The Company has U.S. federal net operating loss (“NOL”) carryforwards totaling $ 3,340 as of December 27, 2025 that are available to offset future taxable income. All of the remaining U.S. federal NOLs were acquired with the MinuteKey purchase in 2018. The MinuteKey NOLs are subject to limitation under IRC §382 from current and prior ownership changes. Management anticipates utilizing all remaining U.S. federal NOLs evenly through 2032 in accordance with the IRC §382 limitation. The Company has state NOL carryforwards with an aggregate tax benefit of $ 1,398 which expire from 2026 to 2040. The table below reflects the significant components of the Company's net deferred tax assets and liabilities at December 27, 2025 and December 28, 2024: December 27, 2025 December 28, 2024 Non-current Non-current Deferred Tax Asset: Inventory $ 25,013 $ 22,852 Accrued bonus / deferred compensation 12,416 11,849 Interest limitation 8,003 20,266 Lease liabilities 25,295 24,735 All other 7,545 13,450 Gross deferred tax assets 78,272 93,152 Valuation allowance for deferred tax assets ( 61 ) ( 292 ) Net deferred tax assets $ 78,211 $ 92,860 Deferred Tax Liability: Intangible asset amortization $ 154,827 $ 165,976 Property and equipment 29,195 27,696 Lease assets 23,613 22,981 All other items 2,446 818 Deferred tax liabilities $ 210,081 $ 217,471 Net deferred tax liability $ 131,870 $ 124,611 Realization of the net deferred tax assets is dependent on the reversal of deferred tax liabilities. Although realization is not assured, management estimates it is more likely than not that the net deferred tax assets will be realized. The amount of net deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward periods are reduced. 53 | December 27, 2025 Form 10-K The Company no longer asserts permanent reinvestment of foreign subsidiary earnings and now expects to distribute certain foreign earnings as needed. Undistributed earnings of our foreign subsidiaries are subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. As of December 27, 2025, the Company recorded a deferred tax liability of $125 on the undistributed earnings of its Canadian subsidiary. A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: Year Ended December 27, 2025 Amount Percent US Federal Statutory Tax Rate $ 11,884 21.0 % State and Local Income Taxes (Net of Federal Effect) (1) 2,952 5.2 % Foreign Tax Effects 139 0.3 % Effect of Cross-Border Tax Laws ( 84 ) ( 0.2 ) % Tax Credits Research & Development Credits ( 766 ) ( 1.4 ) % Other ( 15 ) — % Nontaxable or Nondeductible Items Non-deductible executive compensation 1,213 2.1 % Other 769 1.4 % Other Adjustments 199 0.4 % Effective income tax rate $ 16,291 28.8 % (1) State taxes in California, Florida, Georgia, Oregon, Pennsylvania and Texas made up the majority (greater than 50%) of the tax effect in this category. A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows: Year Ended December 28, 2024 Year Ended December 30, 2023 Statutory federal income tax rate 21.0 % 21.0 % Non-U.S. taxes 2.0 % ( 12.5 ) % State and local income taxes, net of U.S. federal income tax benefit 3.9 % 0.2 % Acquisition and related transaction costs — % ( 3.8 ) % Meals & entertainment 0.9 % ( 2.7 ) % Withholding taxes 2.1 % ( 20.1 ) % Impact of foreign currency — % 3.3 % Reconciliation of tax provision to return ( 3.3 ) % ( 1.4 ) % Non-deductible compensation 8.3 % ( 13.3 ) % Reconciliation of other adjustments 0.1 % ( 0.6 ) % Effective income tax rate 35.0 % ( 29.9 ) % 54 | December 27, 2025 Form 10-K Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 27, 2025 is as follows: Year Ended December 27, 2025 Federal $ 2,400 State and local California 1,403 Other 2,960 Foreign Canada 3,412 Mexico 1,360 Income taxes, net of amounts refunded $ 11,535 The amount of cash income taxes paid, net of amounts refunded, during the years ended December 28, 2024 and December 30, 2023 was $9,622 and $5,356, respectively. The Company has recently become a cash taxpayer for U.S. Federal income tax purposes due to the utilization of NOL carryforwards and general business credit carryforwards. Previously, unrecognized tax benefits were recorded as reductions to the associated deferred tax assets, which were offset by valuation allowances. Because the Company is now a Federal cash taxpayer and no longer has sufficient NOLs or credit carryforwards to offset potential disallowances, the Company reclassified the portion of its unrecognized tax benefits that had been previously netted against deferred tax assets. These amounts were transferred to a liability on the Consolidated Balance Sheets. The Company's reserve for unrecognized tax benefits increased for the year ended December 27, 2025 due to the reclassification and an increase in accrued interest and penalties. A balance of $1,690 of unrecognized tax benefit is shown in the financial statements at December 27, 2025 as a liability. The following is a summary of the changes for the periods indicated below: Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Unrecognized tax benefits - beginning balance $ 1,101 $ 1,101 $ 1,101 Gross increases - tax positions in current period — — — Reclassification from valuation allowance 338 — — Gross increases - tax positions in prior period 251 — — Gross decreases - tax positions in prior period — — — Unrecognized tax benefits - ending balance $ 1,690 $ 1,101 $ 1,101 Amount of unrecognized tax benefit that, if recognized would affect the Company's effective tax rate $ 1,690 $ 1,101 $ 1,101 The Company files a consolidated income tax return in the U.S. and numerous consolidated and separate income tax returns in various states and foreign jurisdictions. There are no significant audits for the period ended December 27, 2025. In general, our income tax returns for the years from 2011 through the current year remain open to examination by federal and state taxing authorities. In addition, our tax years of 2015 through current year remain open and subject to examination by tax authorities in certain foreign jurisdictions in which we have operations. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The legislation included several provisions that impact the timing and magnitude of certain tax deductions, including, among others, making 100% bonus depreciation permanent, allowing for the expensing of domestic research costs, and modifying the business interest expense limitation calculation. These changes were incorporated into our income tax provision for the year ended December 27, 2025. W e will continue to evaluate the impact of these provisions on our 2026 and subsequent consolidated financial statements. 7. LONG-TERM DEBT 55 | December 27, 2025 Form 10-K The following table summarizes the Company’s debt: December 27, 2025 December 28, 2024 Revolving loans $ 36,000 $ 62,000 Senior Term Loan, due 2028 636,960 645,470 Finance leases & other obligations 20,090 11,085 $ 693,050 $ 718,555 Unamortized discount on Senior Term Loan ( 2,087 ) ( 2,940 ) Current portion of long term debt and finance leases ( 14,830 ) ( 12,975 ) Deferred financing fees ( 7,796 ) ( 10,914 ) Total long term debt, net $ 668,337 $ 691,726 Revolving Loans and Term Loans As of December 27, 2025, the ABL Revolver had an outstanding balance of $ 36,000 , and had outstanding letters of credit of $ 3,268 . The Company has $ 279,144 of available borrowings under the revolving credit facility as a source of liquidity as of December 27, 2025 based on the customary asset-backed loan borrowing base and availability provisions. In the third quarter of 2025, the Company amended its ABL Revolver to transition certain collateral requirements previously satisfied through letters of credit to a customs bond program. Prior to this replacement, these letters of credit were issued under the ABL Revolver and reduced the available borrowing capacity thereunder. Following the transition, the restricted capacity was released, increasing the Company’s total available borrowing capacity under the ABL Revolver by approximately $38.0 million. As of December 27, 2025, there was $ 3,268 letters of credit outstanding under the facility. In October 2024 and August 2023, the Company made a $100.0 million and $80.0 million prepayment against the outstanding term loan balance without payment of a premium or penalty, respectively. The aggregate commitment under the asset-based revolving credit agreement (the “ABL Revolver") is $375,000. Portions of the ABL Agreement are separately available for borrowing by the Company's United States subsidiary and Canadian subsidiary for $325,000 and $50,000, respectively. The interest rate for the ABL Revolver is, at the discretion of the Company, adjusted SOFR (or Term Canadian Overnight Repo Rate Average ("CORRA") in the case of Canadian Dollar loans) plus a margin varying from 1.25% to 1.75% per annum based on availability or an alternate base rate (or a Canadian prime rate or alternate base rate in the case of Canadian Dollar loans), plus a margin varying from 0.25% to 0.75% per annum based on availability, plus a 0.10% credit spread adjustment. The stated maturity date of the revolving credit commitments under the ABL Credit Agreement is July 29, 2027. The loans and other amounts outstanding under the ABL Credit Agreement and related documents are guaranteed by Hillman Solutions Corp., and, subject to certain exceptions, the Borrower’s wholly-owned domestic subsidiaries and are secured by substantially all of the Borrower’s and the guarantors’ assets plus, solely in the case of the Canadian Borrower, its and its wholly-owned Canadian subsidiary’s assets, which is guaranteed by the Canadian portion under the ABL Credit Agreement. The interest rate for the term loan, after giving effect to the 2024 Repricing Amendment and 2025 Repricing Amendment described below, at the discretion of the Company, is (i) term SOFR plus a margin of 2.00%; or (ii) an alternate base rate plus a margin of 1.00%. 2024 Term Loan Repricing On March 26, 2024, the Company entered into a Repricing Amendment (2024 Repricing Amendment) on its existing Senior Term Loan due July 14, 2028. The 2024 Repricing Amendment (i) reduced the interest rate per annum applicable to the Term Loan outstanding from SOFR plus a margin varying from 2.5 % to 2.75 % plus a Credit Spread Adjustment ("CSA") varying between 0.11 % to 0.43 % to SOFR plus a margin varying from 2.25 % to 2.50 %, without the CSA and (ii) implemented 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, the Company expensed $ 3,008 consisting of $ 1,554 of existing fees written off and $1,454 in new fees expensed. The Company capitalized an additional $ 33 primarily for the payment of upfront lender fees (original issue discount). 2025 Term Loan Repricing 56 | December 27, 2025 Form 10-K On January 14, 2025, the Company entered into a Repricing Amendment (2025 Repricing Amendment) on its existing Senior Term Loan due July 14, 2028. The 2025 Repricing Amendment (i) reduced the interest rate per annum applicable to the Term Loan outstanding from SOFR plus a margin varying from 2.25 % to 2.50 % to SOFR plus a margin of 2.00 %, as well as a 1.00 % margin for ABR Loans and (ii) implemented 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 2025 Repricing Amendment. In connection with the closing of the 2025 Repricing Amendment, the Company expensed $ 906 of new fees. The aggregate minimum principal maturities of the long-term debt obligations for each of the five years following December 27, 2025 are as follows: Year Amount 2026 $ 9,231 2027 44,661 2028 619,940 2029 — 2030 — Thereafter — Total $ 673,832 Note that future finance lease payments were excluded from the maturity schedule above. Refer to Note 8 - Leases. 8. LEASES Lessee The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both 1) the right to obtain substantially all of the economic benefits from the use of the asset and 2) the right to direct the use of the asset. The Company leases certain distribution center locations, vehicles, forklifts, computer equipment, and its corporate headquarters with expiration dates through 2042. Certain lease arrangements include escalating rent payments and options to extend the lease term. Expected lease terms include these options to extend or terminate the lease when it is reasonably certain the Company will exercise the option. The Company's leasing arrangements do not contain material residual value guarantees nor material restrictive covenants. The components of operating and finance lease costs for the years ended December 27, 2025, December 28, 2024 and December 30, 2023 were as follows: Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Operating lease costs $ 22,129 $ 21,821 $ 21,451 Short term lease costs 3,810 3,164 5,534 Variable lease costs 2,033 2,732 847 Finance lease costs: Amortization of right of use assets 5,774 3,910 2,570 Interest on lease liabilities 1,062 557 285 Rent expense is recognized on a straight-line basis over the expected lease term. Rent expense totaled $ 27,972 , $ 27,717 and $ 27,832 in the years ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively. Rent expense includes operating lease cost as well as expense for non-lease components such as common area maintenance, real estate taxes, real estate insurance, variable costs related to our leased vehicles and also short-term rental expenses. The implicit rate is not determinable in most of the Company’s leases, as such management uses the Company’s incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The weighted average remaining lease terms and discount rates for all of our operating leases as of December 27, 2025 and December 28, 2024 were as follows: 57 | December 27, 2025 Form 10-K December 27, 2025 December 28, 2024 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average remaining lease term 4.84 4.00 5.41 3.06 Weighted average discount rate 6.18 % 5.82 % 6.70 % 5.91 % Supplemental balance sheet information related to the Company's finance leases as of December 27, 2025 and December 28, 2024: December 27, 2025 December 28, 2024 Finance lease assets, net, included in property plant and equipment $ 18,778 $ 9,415 Current portion of long-term debt 5,599 3,720 Long-term debt, less current portion 13,619 6,028 Total principal payable on finance leases $ 19,218 $ 9,748 Supplemental cash flow information related to our operating leases was as follows for the years ended December 27, 2025 and December 28, 2024: Year Ended December 27, 2025 Year Ended December 28, 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow from operating leases $ 22,313 $ 21,934 Operating cash outflow from finance leases 1,031 555 Financing cash outflow from finance leases 5,683 3,682 As of December 27, 2025, our future minimum rental commitments are immaterial for lease agreements beginning after the current reporting period. Maturities of our lease liabilities for all operating and finance leases are as follows as of December 27, 2025: Operating Leases Finance Leases Less than one year $ 22,137 $ 6,484 1 to 2 years 21,012 5,243 2 to 3 years 18,496 4,219 3 to 4 years 13,755 3,505 4 to 5 years 8,712 1,901 After 5 years 10,264 83 Total future minimum rental commitments 94,376 21,435 Less - amounts representing interest ( 12,970 ) ( 2,217 ) Present value of lease liabilities $ 81,406 $ 19,218 In July 2025, the Company entered into two additional operating leases which have not yet commenced; one is for an expansion project at the existing Bakersfield, California location, the second lease is for a new property located in Forest Park, Ohio for the purpose of consolidating office, warehouse, and distribution in the Cincinnati area. Occupancy has not yet commenced for either lease. The estimated future minimum rental commitments are approximately $ 407 per annum for the Bakersfield, California location beginning in 2026. The estimated future minimum rental commitments for the Forest Park lease are approximately $ 4.5 million per year beginning in late summer 2027, depending on substantial completion, and increasing 3.25 % per year thereafter for 15 years, which gives the lease an estimated ending term in 2042. Lessor 58 | December 27, 2025 Form 10-K The Company has certain arrangements for key duplication equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material. 9. DEFERRED COMPENSATION PLAN The Company maintains a deferred compensation plan for key employees (the “Nonqualified Deferred Compensation Plan” or “NQDC”). The NQDC was frozen at the end of fiscal 2021 such that the NQDC does not allow new contributions. The NQDC previously allowed eligible employees to defer up to 25% of salary and commissions and up to 100% of bonuses. Prior to 2021, the Company contributed a matching contribution of 25% on the first $10 of employee deferrals, subject to a five-year vesting schedule. As of December 27, 2025 and December 28, 2024, the Company's Consolidated Balance Sheets included $ 847 and $ 796 , respectively, in restricted investments representing the assets held in mutual funds to fund deferred compensation liabilities owed to the Company's current and former employees. The current portion of the restricted investments was $ 15 and $ 17 as of December 27, 2025 and December 28, 2024, respectively, and is included in other current assets on the accompanying Consolidated Balance Sheets. The assets held in the NQDC are classified as an investment in trading securities, accordingly, the investments are marked-to-market, see Note 14 - Fair Value Measurements for additional detail. During the years ended December 27, 2025, December 28, 2024, and December 30, 2023, distributions from the deferred compensation plan aggregated $ 67 , $ 184 , and $ 537 , respectively. 10. EQUITY AND ACCUMULATED OTHER COMPREHENSIVE LOSS Common Stock Hillman Solutions Corp. has one class of common stock. Share Repurchases On July 31, 2025, the Board of Directors of the Company authorized a share repurchase program of up to $ 100,000 (the “Repurchase Program”) of the Company's common stock. The Repurchase Program permits shares of common stock to be repurchased from time to time at management's discretion, through a variety of methods, including a 10b5-1 trading plan, open market purchases, privately negotiated transactions or transactions otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and number of shares of common stock repurchased will be opportunistic depending on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations. The Repurchase Program does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time. The following table presents information about our repurchases of common stock, all of which were completed through open market purchases (amounts in thousands): Year Ended December 27, 2025 Total number of shares repurchased ( 1,370 ) Total cost of shares repurchased (1) $ ( 12,423 ) (1) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock. The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and excise taxes incurred on share repurchases. Stock Rollforward 59 | December 27, 2025 Form 10-K The following table presents a reconciliation of the number of shares of our common stock outstanding (amounts in thousands). Common Stock (Shares) Treasury Stock (Shares) Total Net Shares Outstanding Balance at December 31, 2022 194,548 0 194,548 Stock option activity, stock awards and employee stock purchase plan 365 0 365 Repurchases of common stock 0 0 0 Balance at December 30, 2023 194,913 0 194,913 Stock option activity, stock awards and employee stock purchase plan 1,793 0 1,793 Repurchases of common stock 0 0 0 Balance at December 28, 2024 196,706 0 196,706 Stock option activity, stock awards and employee stock purchase plan 1,151 0 1,151 Repurchases of common stock 0 ( 1,370 ) ( 1,370 ) Balance at December 27, 2025 197,857 ( 1,370 ) 196,487 Accumulated Other Comprehensive Loss The following is the detail of the change in the Company's accumulated other comprehensive loss from December 31, 2022 to December 27, 2025 including the effect of significant reclassifications out of accumulated other comprehensive loss (net of tax) : Accumulated Other Comprehensive Loss Balance at December 31, 2022 $ ( 21,024 ) Other comprehensive income before reclassifications 8,812 Amounts reclassified from other comprehensive income¹ ( 15,608 ) Net current period other comprehensive loss ( 6,796 ) Balance at December 30, 2023 ( 27,820 ) Other comprehensive loss before reclassifications ( 25,516 ) Amounts reclassified from other comprehensive loss² 11,680 Net current period other comprehensive loss ( 13,836 ) Balance at December 28, 2024 ( 41,656 ) Other comprehensive income before reclassifications 5,842 Amounts reclassified from other comprehensive income 3 ( 2,052 ) Net current period other comprehensive income 3,790 Balance at December 27, 2025 $ ( 37,866 ) (1) For the year ended December 30, 2023, the Company deferred a gain of $ 125 , reclassified a gain of $ 15,608 , including tax expense of $ 3,886 into other comprehensive loss due to hedging activities. The amounts reclassified out of other comprehensive loss were recorded as interest expense. See Note 13 - Derivatives and Hedging for additional information on the interest rate swaps. (2) For the year ended December 28, 2024, the Company deferred a loss of $ 8162 , reclassified a loss of $ 11,680 including a tax benefit of $ 883 into other comprehensive loss due to hedging activities. The amounts reclassified out of other comprehensive loss were recorded as interest expense. See Note 13 - Derivatives and Hedging for additional information on the interest rate swaps. (3) For the year ended December 27, 2025, the Company deferred a loss of $ 1,956 , reclassified a gain of $ 2,052 including tax expense of $ 1,002 into other comprehensive loss due to hedging activities. The amounts reclassified out of other comprehensive loss were recorded as interest expense. See Note 13 - Derivatives and Hedging for additional information on the interest rate swaps. 11. STOCK-BASED COMPENSATION 60 | December 27, 2025 Form 10-K HMAN Group Holdings Inc. 2014 Equity Incentive Plan The Company's former parent, HMAN Group Holdings Inc., established the 2014 Equity Incentive Plan (the “Prior Plan”) in 2014. The Company merged with a special purpose acquisition corporation on July 14, 2021 and began trading on The Nasdaq Capital Market. At that time, share awards under the Prior Plan were converted and modified to reflect share awards of the Company's common stock. The Company is no longer granting new awards under the 2014 Equity Incentive Plan. Awards previously granted under the 2014 Equity Incentive Plan include options, restricted stock, and other stock-based awards for up to an aggregate of 14,523,510 shares of its common stock. The following table summarizes the key assumptions used in the valuation model for valuing the Company's stock compensation awards under the 2014 Equity Incentive Plan: Dividend yield 0 % Risk free interest rate 0.40 % - 1.81 % Expected volatility 31.50 % Expected terms 6.25 years Stock Options The fair value of stock options is determined at the grant date using the Black-Scholes option pricing model. The time-based stock option awards generally vest evenly over four years from the grant date and performance-based options vest based on specified targets such as Company performance and Company stock price hurdles. A summary of the stock option activity under the 2014 Equity Inventive Plan for the year ended December 27, 2025 is presented below (share amounts in thousands): Number of Shares Weighted Avg. Exercise Price per Share (in whole dollars) Weighted Avg. Remaining Contractual Term Outstanding at December 28, 2024 10,162 $ 8.27 4.49 years Granted — Exercised ( 161 ) Forfeited or expired ( 243 ) Outstanding at December 27, 2025 9,758 $ 8.33 3.47 years Exercisable at December 27, 2025 8,774 $ 8.49 3.62 years In fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023, 161 , 1,284 , and 77 options were exercised, respectively. Stock option compensation expense of $ 73 , $ 1,546 , and $ 3,504 was recognized in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the years ended December 27, 2025, December 28, 2024, and December 30, 2023, respectively. For the year ended, December 27, 2025, there was no unrecognized compensation expense for stock options, as all compensation related to the Prior Plan was fully expensed in 2025. The total intrinsic value of share options exercised during the years ended 2025, 2024, and 2023 was $ 390 , $ 3,409 , and $ 162 , respectively. Restricted Stock Awards The Company granted restricted stock at the grant date fair value of the underlying common stock securities. The restrictions lapse in one quarter increments on each of the three anniversaries of the award date, and one quarter on the completion of the relocation of the recipient to the Cincinnati area or earlier in the event of a change in control. The associated expense is recognized over the service period. There were no restricted stock award activity under the 2014 Equity Incentive Plan for the years ended December 27, 2025, December 28, 2024 or December 30, 2023. Restricted Stock Units 61 | December 27, 2025 Form 10-K The Restricted Stock Units ("RSUs") granted to employees for service generally vest after three years, subject to continued employment. There were no RSU activity under the 2014 Equity Incentive Plan for the year ended December 27, 2025. Restricted stock unit compensation expense of $ 55 and $ 582 was recognized in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended December 28, 2024 and December 30, 2023, respectively. 2021 Equity Incentive Plan Effective July 14, 2021, the Company established the 2021 Equity Incentive Plan. On June 7, 2024, the 2021 Equity Incentive Plan was amended to increase the share reserve by 2,000,000 shares of common stock (the 2021 Equity Incentive Plan as amended is referred to as the “2021 Plan”). On June 3, 2025, the 2021 Equity Incentive Plan was amended to increase the share reserve by 1,800,000 shares of common stock (the 2021 Equity Incentive Plan as amended is referred to as the “2021 Plan”). Under the 2021 Plan, the maximum number of shares of Stock that may be delivered in satisfaction of Awards under the Plan as of the Effective Date is (i) 10,950,814 shares, plus (ii) the number of shares of Stock underlying awards under the 2014 Equity Incentive Plan that on or after the Effective Date expire or become unexercisable, or are forfeited, cancelled or otherwise terminated, in each case, without delivery of shares or cash therefore, and would have become available again for grant under the Prior Plan in accordance with its terms (not to exceed 14,523,510 shares of Stock in the aggregate) (the “Share Pool”). The following table summarizes the key assumptions used in the valuation model for valuing the Company's stock compensation awards under the 2021 Equity Incentive Plan: Dividend yield 0 % Risk free interest rate 1.71 % - 4.15 % Expected volatility 30.00 % - 40.00 % Expected terms 6.25 years Stock Options The fair value of stock options is determined at the grant date using the Black-Scholes option pricing model. The time-based stock option awards generally vest evenly over four years from the grant date and performance-based options vest based on specified targets such as Company performance and Company stock price hurdles. A summary of the stock option activity under the 2021 Equity Inventive Plan for the year ended December 27, 2025 is presented below (share amounts in thousands): Number of Shares Weighted Avg. Exercise Price per Share (in whole dollars) Weighted Avg. Remaining Contractual Term Outstanding at December 28, 2024 1,859 $ 9.51 7.75 years Granted — Exercised ( 13 ) Forfeited or expired ( 59 ) Outstanding at December 27, 2025 1,787 $ 9.50 6.47 years Exercisable at December 27, 2025 885 $ 9.54 6.28 years In the fiscal year ended December 27, 2025, 13 options were exercised and in the fiscal year ended December 28, 2024, 48 options were exercised. Stock option compensation expense of $ 1,539 , $ 1,701 and $ 1,124 was recognized in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the years ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively. As of December 27, 2025, there was $ 2,003 of unrecognized compensation expense for unvested common options. The expense will be recognized as a charge to earnings over a weighted average period of approximately 0.94 years. The total intrinsic value of share options exercised during the years ended December 27, 2025 and December 28, 2024 was $ 10 and $46, respectively. Restricted Stock Units 62 | December 27, 2025 Form 10-K The RSUs granted to employees for service generally vest (i) after three years for RSUs granted prior to 2025; and (ii) in equal annual installments over three years for RSUs granted in 2025 and thereafter, subject in each case to continued employment. The RSUs granted to non-employee directors generally vest in full on the first anniversary of the grant date or the date of the annual meeting following the grant date, whichever is earlier. A summary of the restricted stock unit activity under the 2021 Equity Incentive Plan for the year ended December 27, 2025 is presented below (share amounts in thousands): Number of Shares Weighted Avg. Grant Date Fair Value (in whole dollars) Outstanding at December 28, 2024 3,529 9.30 Granted 1,633 9.30 Vested ( 1,016 ) Forfeited or expired ( 95 ) Outstanding at December 27, 2025 4,051 9.17 Restricted stock unit compensation expense of $ 11,556 , $ 9,785 and $ 6,440 was recognized in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively. As of December 27, 2025, there was $ 17,227 of unrecognized compensation expense for unvested common stock options. The expense will be recognized as a charge to earnings over a weighted average period of approximately 1.07 years. Performance Stock Units Beginning in the first quarter of 2025, the Company determined to grant Performance Stock Units ("PSUs"), using return on invested capital as the performance metric, instead of granting stock options. The PSUs granted to employees for service generally vest after three years , subject to continued employment. A summary of the performance stock unit activity under the 2021 Equity Inventive Plan for the year ended December 27, 2025 is presented below (share amounts in thousands): Number of Shares Weighted Avg. Grant Date Fair Value (in whole dollars) Outstanding at December 28, 2024 — — Granted 288 9.55 Vested — Forfeited or expired ( 21 ) Outstanding at December 27, 2025 267 9.55 PSU compensation expense of $ 686 was recognized in the accompanying Consolidated Statements of Comprehensive Income (Loss) for the fiscal year ended December 27, 2025. As of December 27, 2025, there was $ 1,864 of unrecognized compensation expense for unvested PSUs. The expense will be recognized as a charge to earnings over a weighted average period of approximately 1.14 years. 2021 Employee Stock Purchase Plan Our Employee Stock Purchase Plan ("ESPP") became effective on July 14, 2021, in which 1,140,754 shares of common stock were available for issuance under the ESPP. On June 3, 2025, the ESPP plan was amended to increase the share reserve by 1,000,000 shares of common stock, for a total of 2,140,754 shares available for issuance. Under the ESPP, eligible employees are granted options to purchase shares of common stock at 85% of the fair market value at the time of exercise. The option period commences on the first payroll date in January, April, July, and October of each year and ends approximately three months later on the last business day in March, June, September or December. No employee may be granted an option under the Plan if, immediately after the option is granted, the employee would own stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company. Compensation expense associated with ESPP purchase rights is recognized on a straight-line basis over the vesting period. For the years ended December 27, 2025, December 28, 2024, and December 30, 2023, there was approximately $ 392 , $ 376 , and $ 355 of compensation expense related to the ESPP, respectively. 63 | December 27, 2025 Form 10-K 12. EARNINGS PER SHARE Basic earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share include the dilutive effect of stock options, restricted stock awards, and warrants. The following is a reconciliation of the basic and diluted Earnings Per Share ("EPS") computations for both the numerator and denominator (in thousands, except per share data): Year Ended December 27, 2025 Earnings (Numerator) Shares (Denominator) Per Share Amount Net income $ 40,305 197,451 $ 0.20 Dilutive effect of stock options and awards — 2,029 — Net income per diluted common share $ 40,305 199,480 $ 0.20 Year Ended December 28, 2024 Earnings (Numerator) Shares (Denominator) Per Share Amount Net income $ 17,255 196,108 $ 0.09 Dilutive effect of stock options and awards — 2,807 — Net income per diluted common share $ 17,255 198,915 $ 0.09 Year Ended December 30, 2023 Earnings (Numerator) Shares (Denominator) Per Share Amount Net loss $ ( 9,589 ) 194,722 $ ( 0.05 ) Dilutive effect of stock options and awards — — — Net loss per diluted common share $ ( 9,589 ) 194,722 $ ( 0.05 ) Stock options and awards outstanding totaling 5,140 , 2,863 and 5,874 were excluded from the computation for the years ended December 27, 2025, December 28, 2024 and December 30, 2023, respectively, as they would have had an antidilutive effect under the treasury stock method. 13. DERIVATIVES AND HEDGING FASB ASC 815, Derivatives and Hedging ("ASC 815"), provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (1) how and why an entity uses derivative instruments, (2) how the entity accounts for derivative instruments and related hedged items, and (3) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company's objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments. The Company uses derivative financial instruments to manage its exposures to (1) interest rate fluctuations on its floating rate senior term loan and (2) fluctuations in foreign currency exchange rates. The Company measures those instruments at fair value and recognizes changes in the fair value of derivatives in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. The Company does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes. Interest Rate Swap Agreements On December 19, 2023, the Company entered into an interest swap agreement ("2024 Swap 1") for a notional amount of $ 144,000 . The forward start date of the 2024 Swap 1 is July 21, 2024 and the termination date is January 31, 2027. The 2024 Swap 1 has a determined pay fixed interest rate of 3.8 %. In accordance with ASC 815, the Company determined the 2024 Swap 1 constituted an effective cash flow hedge and therefore changes in fair value are recorded within other comprehensive income (loss) within the Company's Statement of Comprehensive Income (Loss) and the deferred gains or losses are reclassified out of other comprehensive income (loss) into interest expense in the same period during which the hedged transactions affect earnings. 64 | December 27, 2025 Form 10-K On December 19, 2023, the Company entered into an interest swap agreement ("2024 Swap 2") for a notional amount of $ 216,000 . The forward start date of the 2024 Swap 2 was July 21, 2024 and the termination date is January 31, 2027. The 2024 Swap 2 has a determined pay fixed interest rate of 3.62 %. In accordance with ASC 815, the Company determined the 2024 Swap 2 constituted an effective cash flow hedge and therefore changes in fair value are recorded within other comprehensive income (loss) within the Company's Statement of Comprehensive Income (Loss) and the deferred gains or losses are reclassified out of other comprehensive income (loss) into interest expense in the same period during which the hedged transactions affect earnings. The following table summarizes the Company's derivatives financial instruments: Asset Derivatives Liability Derivatives As of December 27, 2025 As of December 28, 2024 As of December 27, 2025 As of December 28, 2024 Balance Sheet Location Fair Value Fair Value Balance Sheet Location Fair Value Fair Value Derivatives designated as hedging instruments: 2024 Swap 1 Other current/ non-current assets — 787 Other non-current liabilities ( 670 ) — 2024 Swap 2 Other current/ non-current assets — 1,961 Other non-current liabilities ( 589 ) — Total hedging instruments $ — $ 2,748 $ ( 1,259 ) $ — During 2026, the Company estimates that an additional $ 1,083 will be reclassified as an increase to interest expense/income. Additional information with respect to the fair value of derivative instruments is included in Note 14 - Fair Value Measurements. Foreign Currency Forward Contracts During fiscal 2025 and 2024 the Company entered into foreign currency forward contracts. The purpose of the Company's foreign currency forward contracts is to manage the Company's exposure to fluctuations in the exchange rate of the Canadian dollar. As of December 30, 2023, the Company did not have any foreign currency forward contracts. The total notional amount of contracts outstanding was C$ 1,551 and C$ 4,087 as of December 27, 2025 and December 28, 2024, respectively. The total fair value of the foreign currency forward contracts was $ 1,504 and $ 4,325 as of December 27, 2025 and December 28, 2024, respectively, and was reported on the accompanying Consolidated Balance Sheets in other current liabilities. An increase in other income of $ 94 and $ 269 was recorded in the Consolidated Statements of Comprehensive Income (Loss) for the change in fair value during year ended December 27, 2025 and December 28, 2024, respectively. The Company's foreign currency forward contracts did not qualify for hedge accounting treatment because they did not meet the provisions specified in ASC 815. Accordingly, the gain or loss on these derivatives was recognized in other (income) expense in the Consolidated Statements of Comprehensive Income (Loss). The Company does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes. Additional information with respect to the fair value of derivative instruments is included in Note 14 - Fair Value Measurements. 14. FAIR VALUE MEASUREMENTS The Company uses the accounting guidance that applies to all assets and liabilities that are being measured and reported on a fair value basis. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories. Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. 65 | December 27, 2025 Form 10-K Level 3: Unobservable inputs reflecting the reporting entity's own assumptions. The accounting guidance establishes a hierarchy which requires an entity to maximize the use of quoted market prices and minimize the use of unobservable inputs. An asset or liability's level is based on the lowest level of input that is significant to the fair value measurement. The following tables set forth the Company's financial assets and liabilities that were measured at fair value on a recurring basis during the period, by level, within the fair value hierarchy: As of December 27, 2025 Level 1 Level 2 Level 3 Total Trading securities $ 847 $ — $ — $ 847 Interest rate swaps — ( 1,259 ) — ( 1,259 ) Foreign exchange forward contracts — 1,504 — 1,504 Contingent consideration payable — — 4,358 4,358 As of December 28, 2024 Level 1 Level 2 Level 3 Total Trading securities $ 796 $ — $ — $ 796 Interest rate swaps — 2,748 — 2,748 Foreign exchange forward contracts — 4,325 — 4,325 Contingent consideration payable — — 4,863 4,863 Trading securities are valued using quoted prices on an active exchange. Trading securities represent assets held in a Rabbi Trust to fund deferred compensation liabilities and are included as restricted investments on the accompanying Consolidated Balance Sheets. The Company utilizes interest rate swap contracts to manage our targeted mix of fixed and floating rate debt, and these contracts are valued using observable benchmark rates at commonly quoted intervals for the full term of the swap contracts. As of December 27, 2025 and December 28, 2024, the Company's interest rate swaps were recorded on the accompanying Consolidated Balance Sheets in accordance with ASC 815. The Company utilizes foreign exchange forward contracts to manage our exposure to currency fluctuations in the Canadian dollar versus the U.S. dollar. The forward contracts were valued using observable benchmark rates at commonly quoted intervals during the term of the forward contract. As of December 27, 2025 and December 28, 2024, the foreign exchange forward contracts were included in other current liabilities on the accompanying Consolidated Balance Sheets. The contingent consideration represents future potential earn-out payments related to the Resharp acquisition in fiscal 2019 in which the maximum payout for the contingent consideration is $25.0 million plus 1.8% of net knife-sharpening revenues for five years after the $25.0 million is fully paid and the Instafob acquisition in the first quarter of 2020 where payment is based on 5% of the net sales from 2020 through 2022 plus 1% of net sales from 2023 through 2029. The estimated fair value of the contingent earn-outs was determined using a Monte Carlo analysis examining the frequency and mean value of the resulting earn-out payments. The resulting value captures the risk associated with the form of the payout structure. The risk neutral method is applied, resulting in a value that captures the risk associated with the form of the payout structure and the projection risk. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the estimated value of the liability. The current and non-current portions of these obligations are reported separately on the Consolidated Balance Sheets as other accrued expense and other non-current liabilities, respectively. Subsequent changes in the fair value of the contingent consideration liabilities, as determined by using a simulation model of the Monte Carlo analysis that includes updated projections applicable to the liability, are recorded within other expense (income), net in the Consolidated Statements of Comprehensive Income (Loss). The table below provides a summary of the changes in fair value of the Company’s contingent considerations (Level 3) for Resharp and Instafob as of December 27, 2025. 66 | December 27, 2025 Form 10-K Resharp Instafob Other accrued expense Other non-current liabilities Other accrued expense Other non-current liabilities Total Fair value as of December 28, 2024 $ 226 $ 4,574 $ 23 $ 40 $ 4,863 Fair value of cash consideration paid ( 253 ) — ( 12 ) — ( 265 ) Change in fair value of contingent consideration 256 ( 503 ) 14 ( 7 ) ( 240 ) Fair value as of December 27, 2025 $ 229 $ 4,071 $ 25 $ 33 $ 4,358 Cash, restricted investments, accounts receivable, short-term borrowings and accounts payable are reflected in the Consolidated Financial Statements at book value, which approximates fair value, due to the short-term nature of these instruments. The carrying amount of the long-term debt under the revolving credit facility approximates the fair value at December 27, 2025 and December 28, 2024, as the interest rate is variable and approximates current market rates. The Company also believes the carrying amount of the long-term debt under the senior term loan approximates the fair value at December 27, 2025 and December 28, 2024 because, while subject to a minimum SOFR floor rate, the interest rate approximates current market rates of debt with similar terms and comparable credit risk. Additional information with respect to the derivative instruments is included in Note 13 - Derivatives and Hedging. 15. COMMITMENTS AND CONTINGENCIES Insurance Coverage The Company self-insures our general liability including products liability, automotive liability, and workers' compensation losses up to $ 500 per occurrence. Catastrophic coverage has been purchased from third party insurers with a per occurrence and aggregate limit of $ 60,000 . The two risk areas involving the most significant accounting estimates are workers' compensation and automotive liability. Actuarial valuations performed by the Company's third-party risk insurance expert were used by the Company's management to form the basis for workers' compensation and automotive liability loss reserves. The actuary contemplated the Company's specific loss history, actual claims reported, and industry trends among statistical and other factors to estimate the range of reserves required. Risk insurance reserves are comprised of specific reserves for individual claims and additional amounts expected for development of these claims, as well as for incurred but not yet reported claims. The Company believes that the liability of approximately $ 2,184 recorded for such risk insurance reserves is adequate as of December 27, 2025. As of December 27, 2025, the Company has provided certain vendors and insurers letters of credit aggregating $ 3,268 related to our product purchases and insurance coverage of product liability, workers' compensation, and general liability. The Company self-insures our group health claims up to an annual stop loss limit of $ 300 per participant. Historical group insurance loss experience forms the basis for the recognition of group health insurance reserves. Provisions for losses expected under these programs are recorded based on an analysis of historical insurance claim data and certain actuarial assumptions. The Company believes that the liability of approximately $ 3,472 recorded for such group health insurance reserves is adequate as of December 27, 2025. Import Duties The Company imports large quantities of fastener products which are subject to customs requirements and to tariffs set by governments through mutual agreements and bilateral actions. The Company could be subject to the assessment of additional duties and interest if it or its suppliers fail to comply with customs regulations or similar laws. The U.S. Department of Commerce (the "Department”) conducts administrative reviews of compliance with anti-dumping duty and countervailing duty laws for certain nails products sourced from Asian countries. The Company sourced products under review from vendors in China and Taiwan during the periods selected for review. The Company accrues for the duty expense once it is determined to be probable and the amount can be reasonably estimated. Litigation 67 | December 27, 2025 Form 10-K As of December 27, 2025, the Company is involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on the consolidated financial condition, results of operations, or cash flows . The Kiosk Development Partner Dispute 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 million settlement payment on December 30, 2024 to resolve all claims and disputes alleged by the Kiosk Partner. The Kiosk Partner’s claims alleged that, among other things, the Company failed to pay certain per key royalty fees to the Kiosk Partner allegedly owed under a joint development agreement dating back over 10 years ago. Though the Company believes it had strong defenses to the claims made by the Kiosk Partner, the Company opted to settle the matter before litigation was filed in order to avoid the cost and uncertainty of protracted litigation. 16. STATEMENT OF CASH FLOWS Supplemental disclosures of cash flows information are presented below: Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Cash paid during the period for: Interest 50,422 42,435 55,872 Income taxes, net of refunds 11,535 9,622 5,356 As of December 27, 2025, December 28, 2024 and December 30, 2023, capital expenditures recorded in accounts payable totaled $ 886 , $ 1,627 , and $ 1,186 , respectively. 17. CONCENTRATION OF CREDIT RISKS Financial instruments which potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and trade receivables. The Company places its cash and cash equivalents with high credit quality financial institutions. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. For the year ended December 27, 2025, the largest two customers, Lowe's and Home Depot, accounted for 43.4 % of total revenues and 28.7 % of the year-end accounts receivable balance. For the year ended December 28, 2024, the largest two customers accounted for 40.9 % of total revenues and 32.6 % of the year end accounts receivable balance. 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 27, 2025 and December 28, 2024, approximately 17.1 % and 15 % of the Company's accounts receivable was derived through the Ace Hardware purchasing cooperative, respectively. Except as described in the paragraphs above, no other customer accounted for more than 10% of the Company's accounts receivables in 2025 or 2024. In the years ended December 27, 2025, December 28, 2024 and December 30, 2023, the Company derived over 10% of its total revenues from two separate customers which operated in each of the operating segments. The following table presents revenue from each customer as a percentage of total revenue for each of the years ended: 68 | December 27, 2025 Form 10-K Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Lowe's 20.9 % 18.8 % 20.1 % Home Depot 22.5 % 22.1 % 23.3 % 18. SEGMENT REPORTING AND GEOGRAPHIC INFORMATION The Company's segment reporting structure uses the Company's management reporting structure as the foundation for how the Company manages its business. The Company's reportable segments are strategic business units that offer different products and services, and in the case of our Canada segment in a different geography. They are managed separately due to different products and marketing strategies. The Company periodically evaluates its segment reporting structure in accordance with ASC 350-20-55 and has concluded that it has three reportable segments as of December 27, 2025. The segments are as follows: • Hardware and Protective Solutions • Robotics and Digital Solutions • Canada 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. Please see Note 1 - Basis of Presentation for more information. The Hardware and Protective Solutions segment distributes fasteners and related hardware items, threaded rod, personal protective equipment, key accessories, and letters, numbers, and signs to hardware stores, home centers, mass merchants, and other retail outlets primarily in the United States and Mexico. The Robotics and Digital Solutions segment consists of key duplication and engraving kiosks that can be operated directly by the consumer, primarily in the United States. The kiosks operate in retail and other high-traffic locations offering customized licensed and unlicensed products targeted to consumers in the respective locations. It also includes our associate-assisted key duplication systems. The Robotics and Digital Solutions segment also includes Resharp, our robotic knife sharpening business, and Instafob, which specializes in RFID ("Radio Frequency Identification") fob duplication technology. The Canada segment distributes fasteners and related hardware items, threaded rod, keys, key duplicating systems, engraving kiosks, accessories, personal protective equipment, and identification items, such as tags and letters, numbers, and signs to hardware stores, home centers, mass merchants, industrial distributors, automotive aftermarket distributors, and other retail outlets and industrial Original Equipment Manufacturers (“OEMs”) in Canada. The Canada segment also produces fasteners, stampings, fittings, and processes threaded parts for automotive suppliers and industrial OEMs. For a reconciliation of our segment sales by product category and geographic area, please see Note 2 - Summary of Significant Accounting Policies. For details on our major customers please see Note 17 - Concentration of Credit Risks. The Company has transitioned from using segment operating income in prior years as a measure of performance and now utilizes segment adjusted EBITDA. The Company measures the performance of its segments using segment adjusted earnings before interest, taxes, depreciation and amortization (“segment adjusted EBITDA”). The Company’s President and Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), uses segment adjusted EBITDA predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances, expressed as both actual amounts and as a percentage of sales, on a monthly, quarter to date, and year to date basis when making decisions about allocating resources to the segments. The CODM also uses segment adjusted EBITDA in competitive analysis by benchmarking the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation. The CODM reviews balance sheet accounts on a consolidated basis and does not regularly review balance sheet accounts by segment as part of their performance assessment and decision-making process. The CODM primarily focuses on net sales growth, 69 | December 27, 2025 Form 10-K cost efficiencies, market expansion and product development rather than financial position. The accounting policies of the Company’s segments are the same as those described in Note 1 - Basis of Presentation. Segment adjusted EBITDA is not defined under GAAP and may not be comparable to similarly titled measures used by other companies and should not be considered a substitute for net earnings or other results reported in accordance with GAAP. The tables below present net sales, significant segment expenses, and segment adjusted EBITDA for the reportable segments for the years ended December 27, 2025, December 28, 2024, and December 30, 2023. See Note 2 - Summary of Significant Accounting Policies for a reconciliation of total reportable segments' revenues to consolidated revenues. Certain amounts in the prior year Consolidated Financial Statements and in the Notes to the Consolidated Financial Statements were reclassified to conform to the current year’s presentation. This had no impact on the prior period's consolidated balance sheets, consolidated statements of comprehensive income (loss), consolidated statements of cash flows, or consolidated statements of stockholders' equity. Hardware and Protective Solutions Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Net Sales $ 1,193,957 $ 1,107,993 $ 1,090,473 Significant segment expenses Adjusted cost of sales (exclusive of depreciation and amortization) (1) 654,836 617,689 662,080 Adjusted selling expense (2) 124,033 114,351 104,060 Adjusted Warehouse expense (3) 144,720 143,682 143,308 Adjusted General and administrative expense (4) 74,949 77,386 55,432 Other segment items (5) ( 831 ) ( 813 ) ( 1,788 ) Segment Adjusted EBITDA $ 196,250 $ 155,698 $ 127,381 (1) Adjusted cost of sales (exclusive of depreciation and amortization) excludes an inventory revaluation charge made in the fourth quarter of 2023. (2) Adjusted selling expense excludes expense related to corporate restructuring activities. (3) Adjusted warehouse excludes restructuring expense associated with our distribution center relocations and corporate restructuring activities. (4) Adjusted general and administrative expense excludes stock-based compensation, acquisition and integration costs, expense associated with corporate restructuring and amounts related to the Cybersecurity Incident. (5) Other excludes an impairment charge related to the write down of intangible assets, primarily related to review of certain product offerings in 2023. Robotics and Digital Solutions Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Net sales $ 220,157 $ 216,701 $ 229,546 Significant segment expenses Cost of sales (exclusive of depreciation and amortization) 59,817 60,233 64,389 Adjusted selling expense (1) 67,022 60,642 60,111 Adjusted Warehouse expense (2) 10,632 9,316 10,373 Adjusted General and administrative expense (3) 16,505 16,019 17,880 Other segment items (4) 268 216 125 Segment Adjusted EBITDA $ 65,913 $ 70,275 $ 76,668 (1) Adjusted selling expense excludes related to corporate restructuring activities. (2) Adjusted warehouse expense excludes restructuring expense associated with our distribution center relocations and corporate restructuring activities. (3) Adjusted general and administrative expense excludes stock compensation expense, acquisition and integration expense, consulting expense and legal charges related to settlements, see Note 15 - Commitments and Contingencies. 70 | December 27, 2025 Form 10-K (4) Other excludes the gain or loss on the revaluation of our contingent consideration liability, see Note 14 - Fair Value Measurements. Canada Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Net sales $ 138,110 $ 147,901 $ 156,458 Significant segment expenses Cost of sales (exclusive of depreciation and amortization) 81,222 86,769 97,495 Adjusted selling expense (1) 14,168 14,476 13,721 Adjusted Warehouse expense (2) 22,062 22,398 23,036 Adjusted General and administrative expense (3) 7,423 7,748 7,062 Other segment items 81 730 ( 167 ) Segment Adjusted EBITDA $ 13,154 $ 15,780 $ 15,311 (1) Adjusted selling expense excludes restructuring expense. (2) Adjusted warehouse expense excludes restructuring expense associated with our distribution center relocations and corporate restructuring activities. (3) Adjusted general and administrative expense excludes stock based compensation and expense associated with corporate restructuring activities. The following table reconciles segment adjusted EBITDA by segment to the Company’s consolidated income (loss) before income taxes. Certain amounts in the prior year presentation between segments were reclassified to conform to the current year’s presentation. Year Ended December 27, 2025 Year Ended December 28, 2024 Year Ended December 30, 2023 Hardware and Protective Solutions $ 196,250 $ 155,698 $ 127,381 Robotics and Digital Solutions 65,913 70,275 76,668 Canada 13,154 15,780 15,311 Total adjusted EBITDA 275,317 241,753 219,360 Interest expense 56,467 59,241 68,310 Depreciation 79,870 68,766 59,331 Amortization 61,232 61,274 62,309 Stock compensation expense 14,246 13,463 12,004 Restructuring and other costs 4,058 2,978 3,031 Litigation expense 1,950 5,000 339 Transaction and integration expense 232 1,243 1,754 Change in fair value of contingent consideration ( 240 ) 228 ( 4,936 ) Impairment charges — — 24,600 Refinancing costs 906 3,008 — Total adjusting items 218,721 215,201 226,742 Income (loss) before income taxes $ 56,596 $ 26,552 $ ( 7,382 ) 71 | December 27, 2025 Form 10-K Financial Statement Schedule: Schedule II - VALUATION ACCOUNTS (dollars in thousands) Deducted From Assets in Balance Sheet Allowance for Doubtful Accounts Ending Balance - December 31, 2022 $ 2,405 Additions charged to cost and expense 521 Deductions due to: Others ( 156 ) Ending Balance - December 30, 2023 2,770 Additions charged to cost and expense 9,082 Deductions due to: Others ( 9,025 ) Ending Balance - December 28, 2024 2,827 Additions charged to cost and expense 714 Deductions due to: Others ( 1,597 ) Ending Balance - December 27, 2025 $ 1,944 72 | December 27, 2025 Form 10-K ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. .