Hillman Solutions (NASDAQ:HLMN) reported record net sales and adjusted EBITDA for full-year 2025, with management emphasizing the company’s ability to navigate tariff impacts while continuing to win new business in a soft demand environment. On its fourth-quarter earnings call, the company also issued 2026 guidance that reflects continued sales growth, margin normalization, and a rebound in free cash flow.
Record 2025 results despite tariff and demand headwinds
President and CEO Jon Michael Adinolfi said Hillman delivered “the best year in this company’s 62-year history,” pointing to record net sales and adjusted EBITDA. For 2025, net sales increased 5.4% to $1.552 billion, while adjusted EBITDA increased 13.9% to $275.3 million versus 2024.
Management attributed 2025 sales growth to several factors, including:
- A 3-point contribution from Intex DIY, acquired in August 2024
- A 2-point contribution from new business wins
- Pricing that contributed 5.5 points of growth, which the company said covered higher tariff-related costs
Adinolfi also explained that 2025 profitability benefited from timing effects tied to tariffs and pricing. He said price increases were in place for much of the second half of the year while lower-cost, pre-tariff inventory still flowed through the income statement. He described the impact as peaking in the third quarter, moderating in the fourth quarter, and expected it to be fully normalized in the first quarter of 2026.
Segment performance: strength in HPS, RDS returns to growth
Hillman highlighted strength in its largest segment, Hardware and Protective Solutions (HPS). HPS net sales rose 7.8% to $1.2 billion in 2025, while adjusted EBITDA increased 26% to $196.3 million. Management credited pricing execution tied to tariffs and new business wins in areas including power screws and rope and chain.
Robotics and Digital Solutions (RDS) returned to growth, with 2025 net sales up 1.6% to $220.2 million. Adinolfi said Hillman installed more than 1,800 MiniKey 3.5 kiosks during 2025 and ended the year with nearly 3,500 units in the field. The company completed a rollout with one top customer by the end of 2025 and expects to complete another top-customer rollout by the end of 2026. Management said the enhanced capabilities of MiniKey 3.5—including auto key duplication and “endless aisle”—are driving higher comparable net sales versus older machines.
In Canada, net sales declined 6.6% for the year. Management said new business wins were partially offset by continued soft market volumes, and foreign exchange created more than a 2-point headwind. Adjusted EBITDA margins in Canada were “just shy of 10%,” according to Adinolfi.
Fourth-quarter trends and cash flow impacts
CFO Rocky Kraft said fourth-quarter 2025 net sales increased 4.5% to $365.1 million. Fourth-quarter adjusted gross margin was 47.6%, down sequentially “as expected” and down 10 basis points year-over-year. For the full year, adjusted gross margin rose 60 basis points to 48.7%.
Adjusted EBITDA in the fourth quarter increased 2.3% to $57.5 million, while full-year adjusted EBITDA was $275.3 million. The adjusted EBITDA margin was 15.8% in the quarter and 17.7% for the full year, compared with 16.4% in 2024.
Cash flow in 2025 reflected tariff-related working capital needs. Kraft said operating activities generated $105 million, down from $183 million in 2024. He attributed about $65 million of operating cash flow and free cash flow impact to tariffs. Free cash flow for 2025 totaled $35.1 million, compared with $98.1 million in 2024.
Hillman ended 2025 with net debt of $665.8 million and liquidity of $306 million, including $279 million available under its revolver and $27 million of cash and equivalents. Net leverage improved to 2.4x trailing 12-month adjusted EBITDA from 2.8x at the end of 2024.
On capital allocation, Kraft said the company invested $70 million in capex in 2025, down from $85 million in 2024 as MiniKey 3.5 capital spending moderated. Hillman also repurchased 1.4 million shares for $12.4 million at an average price of $9.07 per share.
2026 guidance: sales growth, margin normalization, and higher free cash flow
For 2026, Hillman guided for net sales of $1.6 billion to $1.7 billion (midpoint $1.65 billion, up 6.3% from 2025). Adjusted EBITDA is expected to be $275 million to $285 million (midpoint $280 million, up 1.7%), and free cash flow is expected to be $100 million to $120 million (midpoint $110 million). Management described the free cash flow outlook as implying “90%+ conversion” of adjusted net income.
Kraft said the high end of the revenue guide assumes flat market volumes, while the low end assumes market volumes decline versus 2025. He added that the midpoint assumes a combination of new business wins and a “mid-single digit” contribution from price. He also said the company will stop providing explicit quarterly price and market volume commentary for competitive reasons and to protect customers.
On profitability, Hillman expects adjusted gross margin of 46% to 47% for 2026, down from 2025 as tariff pricing and costs are “fully realized” in the P&L. Kraft told analysts that first-quarter gross margin is expected to be the low point of the year and “slightly below” the 46%–47% range, driven by seasonally lower volume and what he described as very high-cost inventory flowing through early in the year. He expects sequential improvement in the second quarter and the back half trending toward the high end of the range.
Business drivers: pro expansion, RDS transition, and M&A pipeline
Management repeatedly pointed to new business wins as a key 2026 growth driver. Adinolfi said the company has invested in a larger business development function and is expanding its focus on the “pro” channel, describing Hillman’s pro business as over $400 million. He said Hillman plans to provide more detailed plans at its first Investor Day on March 19.
During Q&A, management also addressed near-term dynamics in Protective Solutions, citing “channel inventory balancing” in the fourth quarter but noting new products coming in 2026 and saying the Intex DIY integration has gone well.
For RDS, management discussed an ongoing customer transition, which Adinolfi said will continue between the first and second quarters of 2026 before anniversarying and becoming a smaller factor. Kraft also said he had not heard of chip-related supply constraints affecting the MiniKey 3.5 program.
Finally, Hillman said its M&A pipeline is “healthy.” Adinolfi said the company feels confident it will complete “1–2 deals” in 2026, citing both previously paused opportunities returning and new opportunities emerging.
About Hillman Solutions (NASDAQ:HLMN)
Hillman Solutions (NASDAQ:HLMN) is a leading provider of hardware and related products to the home improvement, retail, industrial and manufacturing markets. The company’s portfolio encompasses key duplication systems and security solutions, hardware essentials such as fasteners and anchors, signage and labeling products, and outdoor and seasonal items. Hillman’s product offerings are sold through a network of major home improvement retailers, wholesalers, independent distributors and other specialty outlets.
Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman grew from a family-run enterprise into a global supplier of hardware solutions.
