Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

August 12, 2019

Exhibit 99

THE HILLMAN COMPANIES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA (Unaudited)
(dollars in thousands)

EBITDA and Adjusted EBITDA are not measures made in accordance with U.S. generally accepted accounting principles (“GAAP”), and as such, should not be considered a measure of financial performance or condition, liquidity, or profitability. It should not be considered an alternative to GAAP-based net income or income from operations or operating cash flows. Further, because not all companies use identical calculations, amounts reflected by Hillman as EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is included to satisfy a reporting obligation under our indenture. Adjusted EBITDA as presented herein does not include certain adjustments and pro forma run rate measures contemplated by our senior secured credit facilities and our indenture and may also include additional adjustments that were not applicable at the time of the offering of the senior notes governed by our indenture. Adjusted EBITDA is also one of the performance criteria for the Company's annual performance-based bonus plan. The reconciliation of Net loss to Adjusted EBITDA is presented below.

 
 
Thirteen Weeks Ended
 
Twenty-six Weeks Ended
 
 
June 29,
 
June 30,
 
June 29,
 
June 30,
 
 
2019
 
2018
 
2019
 
2018
Net loss
 
$
(19,496
)
 
$
(13,531
)
 
$
(54,764
)
 
$
(23,848
)
Income tax provision (benefit)
 
(2,869
)
 
941

 
1,931

 
3,747

Interest expense, net
 
26,064

 
14,361

 
52,627

 
27,932

Interest expense on junior subordinated debentures
 
3,152

 
3,152

 
6,304

 
6,304

Investment income on trust common securities
 
(94
)
 
(94
)
 
(189
)
 
(189
)
Depreciation
 
16,655

 
9,535

 
32,471

 
18,477

Amortization
 
14,684

 
9,712

 
29,449

 
19,435

EBITDA
 
38,096

 
24,076

 
67,829

 
51,858

 
 
 
 
 
 
 
 
 
   Stock compensation expense
 
301

 
505

 
662

 
992

   Management fees
 
125

 
134

 
256

 
262

   Acquisition and integration expense
 
1,370

 
2,368

 
2,468

 
2,462

Retention and long term incentive bonuses
 
2,030

 

 
4,059

 

   Canada Restructuring (1)
 
1,301

 

 
1,237

 

   Restructuring and other costs (2)
 
5,396

 
3,667

 
10,122

 
6,513

   Asset impairment costs(3) 
 
6,800

 

 
6,800

 

   Refinancing costs
 

 
8,542

 

 
8,542

   Anti-dumping duties
 

 

 

 
(4,128
)
   Mark-to-market adjustment on interest rate swaps
 
1,789

 
(361
)
 
2,902

 
(1,418
)
Adjusted EBITDA
 
$
57,208

 
$
38,931

 
$
96,335

 
$
65,083




1.
Includes charges related to a restructuring plan announced in our Canada segment in 2018, including facility consolidation and charges relating to exiting certain lines of business. See Note 9 - Restructuring of the Notes to the Condensed Consolidated Financial statements for additional information.
2.
Includes restructuring and other costs associated with the implementation of a new pricing program, cost associated with implementing our ERP system in Canada, costs to relocate our distribution center in Edmonton, Canada, costs associated with relocating our distribution center in Dallas, Texas, and one time charges associated with new business wins.
3.
Impairment losses for the disposal of FastKey self-service key duplicating kiosks and related assets.