Hillman : Q2 2023 Results Presentation

Quarterly Earnings

Presentation

Q2 2023

August 8, 2023

Forward Looking Statements

All statements made in this presentation that are consider to be forward-looking are made in good faith by the Company and are intended to qualify for the safe harbor from liability established by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. You should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "target", "goal", "may," "will," "could," "should," "believes,"

"predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company's expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the Company's control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) unfavorable economic conditions that may affect operations, financial condition and cash flows including spending on home renovation or construction projects, inflation, recessions, instability in the financial markets or credit markets; (2) increased supply chain costs, including raw materials, sourcing, transportation and energy; (3) the highly competitive nature of the markets that we serve; (4) the ability to continue to innovate with new products and services; (5) direct and indirect costs associated with the May 2023 ransomware attack, and our receipt of expected insurance receivables associated with that cybersecurity incident; (6) seasonality; (7) large customer concentration; (8) the ability to recruit and retain qualified employees; (9) the outcome of any legal proceedings that may be instituted against the Company; (10) adverse changes in currency exchange rates; (11) the impact of COVID-19 on the Company's business; or (12) regulatory changes and potential legislation that could adversely impact financial results. The foregoing list of factors is not exclusive, and readers should also refer to those risks that are included in the Company's filings with the Securities and Exchange Commission ("SEC"), including the Annual Report on Form 10-K filed February 27, 2023. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward looking statements.

Except as required by applicable law, the Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this communication to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based.

Presentation of Non-GAAP Financial Measures

In addition to the results provided in accordance with U.S. generally accepted accounting principles ("GAAP") throughout this presentation the company has provided non-GAAP financial measures, which present results on a basis adjusted for certain items. The company uses these non-GAAP financial measures for business planning purposes and in measuring its performance relative to that of its competitors. The company believes that these non- GAAP financial measures are useful financial metrics to assess its operating performance from period-to-period by excluding certain items that the company believes are not representative of its core business. These non-GAAP financial measures are not intended to replace, and should not be considered superior to, the presentation of the company's financial results in accordance with GAAP. The use of the non-GAAP financial measures terms may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. These non-GAAP financial measures are reconciled from the respective measures under GAAP in the appendix below.

The company is not able to provide a reconciliation of the company's non-GAAP financial guidance to the corresponding GAAP measures without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation such as certain non-cash, nonrecurring or other items that are included in net income and EBITDA as well as the related tax impacts of these items and asset dispositions / acquisitions and changes in foreign currency exchange rates that are included in cash flow, due to the uncertainty and variability of the nature and amount of these future charges and costs.

Earnings Presentation Q2 2023

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Q2 2023 Financial Review

Highlights for the 13 Weeks Ended July 1, 2023

• Net sales decreased (3.6)% to $380.0 million versus Q2 2022
• • Hardware Solutions approximately flat
  • Robotics and Digital Solutions ("RDS") down (2.0)%
  • Canada down (7.9)%
  • Protective Solution down (16.7)%
• GAAP net income totaled $4.5 million, or $0.02 per diluted share, compared to $8.8 million, or $0.04 per diluted share, in Q2 2022
• Adjusted EBITDA totaled $58.0 million compared to $62.3 million in the prior year quarter
• Adjusted EBITDA (ttm) / Net Debt: 4.0x at quarter end, improved from 4.2x from December 31, 2022

Please see reconciliation tables in the Appendix of this presentation for non-GAAP metrics.

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Q2 2023 Operational Review

Highlights for the 13 Weeks Ended July 1, 2023

• Reiterated full year 2023 guidance across all metrics
• Inventory reduced by $20.9 million during the quarter; bringing year-to-date total to $59.3 million
• Fill rates averaged approximately 96% year to date
• New business (with existing and new customers) wins secured across multiple business segments - expect to roll out two sizable new business wins in the second half of the year
• Cost of goods peaked in May 2023 (driven by high container costs during the Summer of 2022) - as a result, margins are expected to expand during the second half of 2023

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Q2 2023 Financial Review

Highlights for the 26 Weeks Ended July 1, 2023

• Net sales decreased (3.6)% to $729.7 million versus the 26 weeks ended June 25, 2022
• • Hardware Solutions +3.6%
  • Robotics and Digital Solutions ("RDS") (0.9)%
  • Canada (6.8)%
  • Protective Solutions (17.6)% (excl. COVID sales)
• GAAP net loss totaled $(4.6) million, or $(0.02) per diluted share, compared to net income of $6.9 million, or $0.04 per diluted share, during the 26 weeks ended June 25, 2022
• Adjusted EBITDA totaled $98.2 million compared to $106.3 million during the the 26 weeks ended June 25, 2022
• Free Cash Flow totaled $78.0 million compared to $(14.1) million during the 26 weeks ended June 25, 2022

Please see reconciliation tables in the Appendix of this presentation for non-GAAP metrics.

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