Form: 424B3

Prospectus filed pursuant to Rule 424(b)(3)

August 3, 2022


Filed Pursuant to Rule 424(b)(3)
Registration No. 333-258823
 
PROSPECTUS SUPPLEMENT NO. 3
(to Prospectus dated March 28, 2022)
 
HILLMAN SOLUTIONS CORP.
 
Secondary Offering of
144,217,397* Shares of Common Stock
 
This prospectus supplement amends and supplements the prospectus dated March 28, 2022 (as supplemented or amended from time to time, the “Prospectus”), which forms a part of our Registration Statement on Form S-1 (No. 333-258823). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on August 3, 2022 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.
 
The Prospectus and this prospectus supplement relate to the offer and sale, from time to time, by the selling securityholders named in the Prospectus (the “Selling Securityholders”), or any of their permitted transferees, of (i) up to an aggregate of 37,500,000 shares of our common stock that were issued to certain investors (collectively, the “PIPE Investors”) in a private placement in connection with the closing of the Business Combination (as defined in the Prospectus); (ii) up to an aggregate of 98,216,331 shares of our common stock otherwise held by the Selling Securityholders; (iii) up to an aggregate of 501,066 shares of our common stock that may be issued upon exercise of certain public warrants; and (iv) up to an aggregate of 8,000,000 shares of our common stock that may be issued upon exercise of certain private placement warrants. On November 22, 2021, we announced the redemption of the warrants included in our Registration Statement. As a result of the ensuing exercises of the warrants and the redemption of the remaining warrants, the Company had no warrants outstanding as of December 22, 2021. The Prospectus and this prospectus supplement also cover any additional securities that may become issuable by reason of share splits, share dividends or other similar transactions.
 
Our common stock is listed on Nasdaq under the symbols “HLMN”. On August 2, 2022, the closing price of our common stock was $10.25 per share.

* 101,257,319 shares as of August 3, 2022.
 
Investing in our securities involves risks that are described in the “Risk Factors” section beginning on page 12 of the Prospectus.
 
Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
 
The date of this prospectus supplement is August 3, 2022.


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 2022
OR
 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 001-39609
Hillman Solutions Corp.
(Exact name of registrant as specified in its charter)
Delaware 85-2096734
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
10590 Hamilton Avenue 45231
Cincinnati , Ohio
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (513) 851-4900
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, par value $0.0001 per share HLMN The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act. (Check one):
Large accelerated filer   ☐    Accelerated filer   ☐
Non-accelerated filer  
☒  (Do not check if a smaller reporting company)
   Smaller reporting company   ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
On August 2, 2022, 194,394,767 shares of common stock, par value $0.0001 per share, were outstanding.

HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
INDEX
 
PART I. FINANCIAL INFORMATION PAGE
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Page 3 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands, except per share amounts)

  June 25,
2022		 December 25,
2021
ASSETS
Current assets:
Cash and cash equivalents $ 17,723  $ 14,605 
Accounts receivable, net of allowances of $2,579 ($2,891 - 2021)
 132,846  107,212 
Inventories, net 574,848  533,530 
Other current assets 18,761  12,962 
Total current assets 744,178  668,309 
Property and equipment, net of accumulated depreciation of $309,464 ($284,069 - 2021)
 176,824  174,312 
Goodwill 825,070  825,371 
Other intangibles, net of accumulated amortization of $383,715 ($352,695 - 2021)
 765,888  794,700 
Operating lease right of use assets 77,925  82,269 
Deferred tax assets —  1,323 
Other assets 26,414  16,638 
Total assets $ 2,616,299  $ 2,562,922 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 187,527  $ 186,126 
Current portion of debt and finance lease liabilities 11,860  11,404 
Current portion of operating lease liabilities 12,777  13,088 
Accrued expenses:
Salaries and wages 11,076  8,606 
Pricing allowances 8,815  10,672 
Income and other taxes 4,782  4,829 
Interest 1,562  1,519 
Other accrued liabilities 44,335  41,052 
Total current liabilities 282,734  277,296 
Long-term debt 929,246  906,531 
Deferred tax liabilities 145,394  137,764 
Operating lease liabilities 70,741  74,476 
Other non-current liabilities 11,096  16,760 
Total liabilities $ 1,439,211  $ 1,412,827 
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock, $0.0001 par, 500,000,000 shares authorized, 194,359,084 issued and 194,270,779 outstanding at June 25, 2022 and 194,083,625 issued and 193,995,320 outstanding at December 25, 2021
 20  20 
Additional paid-in capital 1,396,863  1,387,410 
Accumulated deficit (203,252) (210,181)
Accumulated other comprehensive income (loss) (16,543) (27,154)
Total stockholders' equity 1,177,088  1,150,095 
Total liabilities and stockholders' equity $ 2,616,299  $ 2,562,922 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Page 4 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
(dollars in thousands, except per share amounts)


Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Net sales $ 394,114  $ 375,715  $ 757,127  $ 716,996 
Cost of sales (exclusive of depreciation and amortization shown separately below) 220,146  215,967  433,419  417,265 
Selling, general and administrative expenses 118,229  111,662  232,767  214,841 
Depreciation 14,172  15,270  27,426  31,611 
Amortization 15,566  15,414  31,087  30,323 
Management fees to related party —  88  —  214 
Other (income) expense, net (1,772) (2,195) (4,194) (2,547)
Income (loss) from operations 27,773  19,509  36,622  25,289 
Interest expense, net 12,533  19,159  24,161  38,178 
Interest expense on junior subordinated debentures —  3,152  —  6,304 
(Gain) loss on mark-to-market adjustments —  (751) —  (1,424)
Investment income on trust common securities —  (94) —  (189)
Income (loss) before income taxes 15,240  (1,957) 12,461  (17,580)
Income tax provision (benefit) 6,424  1,428  5,532  (5,225)
Net income (loss) $ 8,816  $ (3,385) $ 6,929  $ (12,355)
Basic income (loss) per share $ 0.05  $ (0.04) $ 0.04  $ (0.14)
Weighted average basic shares outstanding 194,135 91,217 194,071 91,266
Diluted income (loss) per share $ 0.04  $ (0.04) $ 0.04  $ (0.14)
Weighted average diluted shares outstanding 196,686 91,217 195,932 91,266
Net income (loss) from above $ 8,816  $ (3,385) $ 6,929  $ (12,355)
Other comprehensive income (loss):
Foreign currency translation adjustments (4,646) 3,842  (911) 6,315 
Hedging activity 3,109  —  11,522  — 
Total other comprehensive income (loss) (1,537) 3,842  10,611  6,315 
Comprehensive income (loss) $ 7,279  $ 457  $ 17,540  $ (6,040)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


Page 5 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(dollars in thousands)
  Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Cash flows from operating activities:
Net income (loss) $ 6,929  $ (12,355)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 58,513  61,934 
Deferred income taxes 8,230  (4,709)
Deferred financing and original issue discount amortization 2,598  1,800 
Stock-based compensation expense 8,304  3,537 
Change in fair value of contingent consideration (3,646) (1,212)
Other non-cash interest and change in fair value of interest rate swap —  (1,424)
Changes in operating items:
Accounts receivable, net (25,163) (23,547)
Inventories, net (42,973) (73,049)
Other assets (4,125) (15,786)
Accounts payable 1,502  22,443 
Other accrued liabilities 4,501  (17,471)
Net cash provided by (used for) operating activities 14,670  (59,839)
Cash flows from investing activities:
Acquisition of business, net of cash received (2,500) (39,102)
Capital expenditures (28,921) (22,684)
Net cash used for investing activities (31,421) (61,786)
Cash flows from financing activities:
Repayments of senior term loans (4,256) (5,304)
Borrowings on senior term loans —  35,000 
Financing fees —  (1,027)
Borrowings on revolving credit loans 121,000  128,000 
Repayments of revolving credit loans (97,000) (42,000)
Principal payments under finance lease obligations (556) (460)
Proceeds from exercise of stock options 1,149  1,761 
Cash payments related to hedging activities (944) — 
Net cash provided by financing activities 19,393  115,970 
Effect of exchange rate changes on cash 476  390 
Net increase (decrease) in cash and cash equivalents 3,118  (5,265)
Cash and cash equivalents at beginning of period 14,605  21,520 
Cash and cash equivalents at end of period $ 17,723  $ 16,255 
Supplemental disclosure of cash flow information:
Interest paid on junior subordinated debentures, net $ —  $ 6,115 
Interest paid 20,062  34,439 
Income taxes paid 1,851  1,740 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Page 6 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)
(dollars in thousands)


Common Stock
Shares (in thousands) Amount Additional Paid-in-capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Equity
Twenty-six weeks ended June 25, 2022
Balance at December 25, 2021 193,995  $ 20  $ 1,387,410  $ (210,181) $ (27,154) $ 1,150,095 
Net income (loss) —  —  —  (1,887) —  (1,887)
Stock option activity, stock awards and employee stock purchase plan 53  —  6,018  —  —  6,018 
Hedging activity —  —  —  —  8,413  8,413 
Change in cumulative foreign currency translation adjustment  —  —  —  —  3,735  3,735 
Balance at March 26, 2022 194,048  $ 20  $ 1,393,428  $ (212,068) $ (15,006) $ 1,166,374 
Net income (loss) —  —  —  8,816  —  8,816 
Stock option activity, stock awards and employee stock purchase plan 223  —  3,435  —  —  3,435 
Hedging activity —  —  —  —  3,109  3,109 
Change in cumulative foreign currency translation adjustment  —  —  —  —  (4,646) (4,646)
Balance at June 25, 2022 194,271  $ 20  $ 1,396,863  $ (203,252) $ (16,543) $ 1,177,088 
Twenty-six weeks ended June 26, 2021
Balance at December 26, 2020 90,935  $ 9  $ 565,815  $ (171,849) $ (29,388) $ 364,587 
Net income (loss) —  —  —  (8,970) —  (8,970)
Stock option activity, stock awards and employee stock purchase plan 268  —  3,384  —  —  3,384 
Change in cumulative foreign currency translation adjustment  —  —  —  —  2,473  2,473 
Balance at March 27, 2021 91,203  $ 9  $ 569,199  $ (180,819) $ (26,915) $ 361,474 
Net income (loss) —  —  —  (3,385) —  (3,385)
Stock option activity, stock awards and employee stock purchase plan 18  —  1,914  —  —  1,914 
Change in cumulative foreign currency translation adjustment  —  —  —  —  3,842  3,842 
Balance at June 26, 2021 91,221  $ 9  $ 571,113  $ (184,204) $ (23,073) $ 363,845 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Page 7 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
 

1. Basis of Presentation:

The accompanying condensed financial statements include the consolidated accounts of the Hillman Solutions Corp. and its wholly-owned subsidiaries (collectively “Hillman” or the “Company”). The accompanying unaudited financial statements include the condensed consolidated accounts of the Company for the thirteen and twenty-six weeks ended June 25, 2022. Unless the context requires otherwise, references to "Hillman," "we," "us," "our," or "our Company" refer to Hillman Solutions Corp. and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

The accompanying unaudited Condensed Consolidated Financial Statements present information in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and applicable rules of Regulation S-X. Accordingly, they do not include all information or footnotes required by U.S. generally accepted accounting principles for complete financial statements. Operating results for the thirteen and twenty-six weeks ended June 25, 2022 do not necessarily indicate the results that may be expected for the full year. For further information, refer to the Consolidated Financial Statements for the year ended December 25, 2021 and notes thereto included in the Form 10-K filed on March 16, 2022 with the Securities and Exchange Commission (“SEC”).

On July 14, 2021, privately held HMAN Group Holdings Inc. ("Old Hillman"), and Landcadia Holdings III, Inc. (“Landcadia” and after the business combination described herein, “New Hillman”), a special purpose acquisition company ("SPAC"), consummated the previously announced business combination (the “Closing”) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, the "Merger Agreement”) by and among Landcadia, Helios Sun Merger Sub, a wholly-owned subsidiary of Landcadia (“Merger Sub”), HMAN Group Holdings Inc., a Delaware corporation (“Hillman Holdco”) and CCMP Sellers’ Representative, LLC, a Delaware Limited Liability Company in its capacity as the Stockholder Representative thereunder (the “Stockholder Representative”). Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Hillman Holdco with Hillman Holdco surviving the merger as a wholly owned subsidiary of New Hillman, which was renamed “Hillman Solutions Corp.” (the “Merger” and together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). Unless the context indicates otherwise, the discussion of the Company and its financial condition and results of operations is with respect to New Hillman following the closing date and Old Hillman prior to the closing date. See Note 3 - Merger Agreement for more information.

“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.

In connection with the closing of the Business Combination on July 14, 2021, Landcadia changed its name from “Landcadia Holdings III, Inc." to “Hillman Solutions Corp.” and the Company’s common stock and warrants began trading on The Nasdaq Stock Market under the trading symbols “HLMN” and “HLMNW”, respectively. As of December 25, 2021, the Company exercised and redeemed all outstanding warrants.


2. Summary of Significant Accounting Policies:
The significant accounting policies should be read in conjunction with the significant accounting policies included in the Form 10-K filed on March 16, 2022 with the SEC.
Use of Estimates in the Preparation of Financial Statements:
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses for the reporting periods. Actual results may differ from these estimates.
The extent to which COVID-19 impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of COVID-19, the extent to which it will impact worldwide macroeconomic conditions including interest rates, employment rates and health insurance coverage, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting
Page 8 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts COVID-19 as of June 25, 2022 and through the date of this
report. The accounting matters assessed included, but were not limited to the carrying value of the goodwill and other long-lived assets. While there was not a material impact to the Company’s Condensed Consolidated Financial Statements as of and for the thirteen and twenty-six weeks ended June 25, 2022, the Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to the Company’s Condensed Consolidated Financial Statements in future reporting periods.

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 Condensed 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 reserves 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. Returns and allowances are included
in the determination of net sales.

The following table displays our disaggregated revenue by product category:

Thirteen weeks ended June 25, 2022
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
Fastening and Hardware $ 225,377  $ —  $ 48,473  $ 273,850 
Personal Protective 54,465  —  220  54,685 
Keys and Key Accessories —  49,837  792  50,629 
Engraving and Resharp —  14,939  11  14,950 
Consolidated $ 279,842  $ 64,776  $ 49,496  $ 394,114 
Thirteen weeks ended June 26, 2021
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
Fastening and Hardware $ 201,208  $ —  $ 45,826  $ 247,034 
Personal Protective 61,921  —  178  62,099 
Keys and Key Accessories —  50,289  206  50,495 
Engraving and Resharp —  16,062  25  16,087 
Consolidated $ 263,129  $ 66,351  $ 46,235  $ 375,715 


Page 9 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
Twenty-six weeks ended June 25, 2022
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
Fastening and Hardware $ 414,684  $ —  $ 82,132  $ 496,816 
Personal Protective 131,573  —  662  132,235 
Keys and Key Accessories —  98,213  1,466  99,679 
Engraving and Resharp —  28,371  26  28,397 
Consolidated $ 546,257  $ 126,584  $ 84,286  $ 757,127 

Twenty-six weeks ended June 26, 2021
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
Fastening and Hardware $ 367,810  $ —  $ 79,917  $ 447,727 
Personal Protective 146,248  —  191  146,439 
Keys and Key Accessories —  92,383  567  92,950 
Engraving and Resharp —  29,847  33  29,880 
Consolidated $ 514,058  $ 122,230  $ 80,708  $ 716,996 


The following table disaggregates our revenue by geographic location:

Thirteen weeks ended June 25, 2022
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
United States $ 274,417  $ 63,716  $ —  $ 338,133 
Canada 2,067  1,060  49,496  52,623 
Mexico 3,358  —  —  3,358 
Consolidated $ 279,842  $ 64,776  $ 49,496  $ 394,114 

Thirteen weeks ended June 26, 2021
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
United States $ 257,742  $ 65,739  $ —  $ 323,481 
Canada 2,050  612  46,235  48,897 
Mexico 3,337  —  —  3,337 
Consolidated $ 263,129  $ 66,351  $ 46,235  $ 375,715 

Page 10 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
Twenty-six weeks ended June 25, 2022
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
United States $ 535,479  $ 124,694  $ —  $ 660,173 
Canada 3,853  1,890  84,286  90,029 
Mexico 6,925  —  —  6,925 
Consolidated $ 546,257  $ 126,584  $ 84,286  $ 757,127 

Twenty-six weeks ended June 26, 2021
Hardware and Protective Solutions Robotics and Digital Solutions Canada Total Revenue
United States $ 504,539  $ 121,039  $ —  $ 625,578 
Canada 3,279  1,191  80,708  85,178 
Mexico 6,240  —  —  6,240 
Consolidated $ 514,058  $ 122,230  $ 80,708  $ 716,996 


Our revenue by geography is allocated based on the location of our sales operations. Our Hardware and Protective Solutions segment contains sales of Big Time Products personal protective equipment into Canada. Our Robotics and Digital Solutions segment contains sales of MinuteKey Canada.
Hardware and Protective Solutions revenues consist primarily of the delivery of fasteners, anchors, specialty fastening products, and personal protective equipment such as gloves and eye-wear, as well as in-store merchandising services for the related product category.

Robotics and Digital Solutions revenues consist primarily of sales of keys and identification tags through self-service key duplication and engraving kiosks. It also includes our associate-assisted key duplication systems and key accessories.

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, 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.

Page 11 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
3. Merger Agreement:

On July 14, 2021, the Merger between Old Hillman and Landcadia was consummated. Pursuant to the Merger Agreement, at the closing date of the Merger, the outstanding shares of Old Hillman common stock were converted into 91,220,901 shares of New Hillman common stock as calculated pursuant to the Merger Agreement.

The Merger was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP ("Generally Accepted Accounting Principles"). Under this method of accounting, Landcadia is treated as the “acquired” company for financial reporting purposes.

This determination was based primarily on Old Hillman having the ability to appoint a majority of the initial Board of Directors of the combined entity, Old Hillman's senior management comprising the majority of the senior management of the combined company, and the ongoing operations of Old Hillman comprising the ongoing operations of the combined company. Accordingly, for accounting purposes, the Merger was treated as the equivalent of New Hillman issuing shares for the net assets of Landcadia, accompanied by a recapitalization. The net assets of Landcadia were stated at carrying value, with no goodwill or other intangible assets recorded. The historical statements of the combined entity prior to the Merger are presented as those of Old Hillman with the exception of the shares and par value of equity recast to reflect the exchange ratio on the Closing Date, adjusted on a retroactive basis. A summary of the impact of the reverse recapitalization on the cash, cash equivalents and restricted cash, change in net assets and the change in common shares is included in the tables below.

Landcadia cash and cash equivalents (1)
$ 479,602 
PIPE investment proceeds (2)
375,000
Less cash paid to underwriters and other transaction costs, net of tax(3)
(36,140)
Net change in cash and cash equivalents as a result of recapitalization $ 818,462 
Prepaid expenses and other current assets (1)
132
Accounts payable and other accrued expenses (1)
(81)
Warrant liabilities (1)(4)
(77,190)
Change in net assets as a result of recapitalization $ 741,323 

The change in number of shares outstanding as a result of the reverse recapitalization is summarized as follows:

Common shares issued to New Hillman Shareholders (5)
91,220,901 
Shares issued to SPAC sponsors and public shareholders (6)
58,672,000 
Common shares issued to PIPE investors (2)
37,500,000 
Common Shares outstanding immediately after the Business Combination 187,392,901 

1.These assets and liabilities represent the reported balances as of the Closing Date immediately prior to the Business
Combination. The recapitalization of the assets and liabilities from Landcadia's balance sheet was a non-cash financing
activity.
2.In connection with the Business Combination, Landcadia entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which it issued 37,500,000 shares of common stock at $10.00 per share (the “PIPE Shares”) for an aggregate purchase price of $375,000 (the “PIPE Financing”), which closed simultaneously with the consummation of the Business Combination.
3.In connection with the Business Combination, the Company incurred $36,140 of transaction costs, net of tax, consisting of underwriting, legal and other professional fees which were recorded as accumulated deficit as a reduction of proceeds.
4.The warrants acquired in the Merger include (a) redeemable warrants issued by Landcadia and sold as part of the units in the Landcadia IPO (whether they were purchased in the Landcadia IPO or thereafter in the open market), which are exercisable for an aggregate of 16,666,628 shares of common stock at a purchase price of $11.50 per share (the “Public Warrants”) and (b) warrants issued by Landcadia to the sponsors in a private placement simultaneously with
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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
the closing of the Landcadia IPO, which are exercisable for an aggregate of 8,000,000 shares of common stock at a purchase price of $11.50 per share (the “Private Placement Warrants”).
5.The Company issued 91,220,901 common shares in exchange for 553,439 Old Hillman common shares resulting in an exchange ratio of 164.83. This exchange ratio was applied to Old Hillman's common shares which further impacted common stock held at par value and additional paid in capital, as well as the calculation of weighted average shares outstanding and loss per common share.
6.The Company issued 50,000,000 shares to the public shareholders and 8,672,000 shares to the SPAC sponsor shareholders at the Closing Date.


4. Recent Accounting Pronouncements:

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by the new standard.

In January 2021, FASB issued ASU 2021-01, Reference Rate Reform, to expand the scope of ASU 2020-04 by allowing an entity to apply the optional expedients, by stating that a change to the interest rate used for margining, discounting or contract price alignment for a derivative is not considered to be a change to the critical terms of the hedging relationship that requires designation. The entity may apply the contract modification relief provided in ASU 2020-04 and continue to account for the derivative in the same manner that existed prior to the changes resulting from reference rate reform or the discounting transition. The Company is currently evaluating its contracts and the optional expedients provided by the new standard.

On October 28, 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and
Contract Liabilities from Contracts with Customers, which amends Accounting Standards Codification ("ASC") 805 to require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date. This update is intended to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to 1) the recognition of an acquired contract liability, and 2) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendment is effective on fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact provided by the new standard.

On March 28, 2022, the FASB issued ASU 2022-01, which clarifies the guidance in ASC Topic 815, Derivatives and Hedging on fair value hedge accounting of interest rate risk for portfolios of financial assets. The ASU amends the guidance in ASU 2017-12 which established the "last-of-layer" method for making the fair value hedge accounting for these portfolios more accessible. ASU 2022-01 renames that method the "portfolio layer'' method. Under current guidance, the last-of-layer method enables an entity to apply fair value hedging to a stated amount of a closed portfolio of prepayable financial assets without having to consider prepayment risk or credit risk when measuring those assets. ASU 2022-01 expands the scope of this guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and non-prepayable financial assets. The amendment is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact provided by the new standard.



5. Acquisitions:

On April 16, 2021, the Company completed its acquisition of Oz Post International, LLC ("OZCO"), a leading manufacturer of superior quality hardware that offers structural fasteners and connectors used for decks, fences and other outdoor structures, for a total purchase price of $39,834. The Company entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018 (the "2018 Term Loan"), which provided $35,000 of incremental term loan funds to be used to
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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
finance the acquisition. OZCO 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 OZCO.

Accounts receivable $ 1,341 
Inventory 3,435 
Other current assets 26 
Property and equipment 595
Goodwill 9,093 
Customer relationships 23,500 
Trade names 2,600 
Technology 4,000 
Total assets acquired 44,590 
Less:
Liabilities assumed (4,756)
Total purchase price $ 39,834 

Pro forma financial information has not been presented for OZCO as their associated financial results are insignificant to the financial results of the Company on a standalone basis.

On March 7, 2022, the Company completed its acquisition of the Irvine, California-based Monkey Hook, LLC ("Monkey Hook") for a total purchase price of $2,800, which includes $300 in holdback that remains payable to the seller. Monkey Hook products are designed to hang artwork on drywall where no stud is present. Monkey Hook sells its products throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment. The total purchase price is preliminary as the Company is in the process of finalizing certain working capital adjustments.

6. Goodwill and Other Intangible Assets:
Goodwill amounts by reportable segment are summarized as follows:
Goodwill at
Acquisitions (1)
Dispositions
Other (2)
Goodwill at
December 25, 2021 June 25, 2022
Hardware and Protective Solutions $ 574,698  $ (158) $ —  $ 133  $ 574,673 
Robotics and Digital Solutions 220,936  —  —  —  220,936 
Canada 29,737  —  —  (276) 29,461 
Total $ 825,371  $ (158) $ —  $ (143) $ 825,070 
 
(1)The amount relates to the Ozco acquisition, see Note 5 - Acquisitions for additional information.
(2)The "Other" change to goodwill relates to adjustments resulting from fluctuations in foreign currency exchange rates for the Canada and Mexico reporting units.
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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
Other intangibles, net, as of June 25, 2022 and December 25, 2021 consist of the following: 
Estimated
Useful Life
(Years)		 June 25, 2022 December 25, 2021
Customer relationships 13 - 20 $ 964,919  $ 965,054 
Trademarks - Indefinite Indefinite 85,554  85,591 
Trademarks - Other 7 - 15 31,387  29,000 
Technology and patents 8 - 12 67,743  67,750 
Intangible assets, gross 1,149,603  1,147,395 
Less: Accumulated amortization 383,715  352,695 
Other intangibles, net $ 765,888  $ 794,700 
The amortization expense for intangible assets, including the adjustments resulting from fluctuations in foreign currency exchange rates for the thirteen and twenty-six weeks ended June 25, 2022 was $15,566 and $31,087, respectively. Amortization expense for the thirteen and twenty-six weeks ended June 26, 2021 was $15,414 and $30,323, respectively.

The Company tests goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter. Impairment is also tested when events or changes in circumstances indicate that the carrying values of the assets may be greater than their fair values. During the thirteen and twenty-six weeks ended June 25, 2022 and the thirteen and twenty-six weeks ended June 26, 2021, the Company did not identify any triggering events that would result in an impairment analysis outside of the annual assessment.


7. Commitments and Contingencies:

The Company self-insures its general liability including product liability, automotive and workers' compensation losses up to $500 per occurrence. Catastrophic coverage has been purchased from third party insurers for occurrences up to and aggregate limits 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 outside 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 $2,711 recorded for such risks is adequate as of June 25, 2022.

As of June 25, 2022, the Company has provided certain vendors and insurers letters of credit aggregating to $32,790 related to our product purchases and insurance coverage for product liability, workers’ compensation, and general liability.

The Company self-insures 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 $2,498 recorded for such risks is adequate as of June 25, 2022.
The Company imports large quantities of fastener products which are subject to customs requirements and to tariffs and quotas 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 has received requests from petitioners to conduct administrative reviews of compliance with anti-dumping duty and countervailing duty laws for certain nail 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.
On June 1, 2021, Hy-Ko Products Company LLC ("Hy-Ko"), a manufacturer of key duplication machines, filed a complaint for patent infringement against Hillman in the United States District Court for the Eastern District of Texas (Marshall Division). The case was assigned Civil Action No. 2:21-cv-0197. Hy-Ko's complaint alleges that Hillman's KeyKrafter and PKOR key
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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
duplication machines infringe U.S. Patent Nos. 9,656,332, 9,682,432, 9,687,920, and 10,421,113, which are assigned to Hy-Ko, and seeks damages and injunctive relief against Hillman. Hy-Ko's complaint additionally contains allegations of unfair competition under the Federal Lanham Act and conversion/receipt of stolen property, as well as a cause of action for "replevin" for return of stolen property.

On August 2, 2021, Hy-Ko filed an Amended Complaint which did not deviate substantially from the initial Complaint. Hillman responded on August 16, 2021, by filing a Motion to Dismiss the conversion and replevin claims because they are barred by the statute of limitations. In its Motion to Dismiss, Hillman also requested that the Court strike numerous paragraphs of Hy-Ko's Amended Complaint that, on their face, have nothing to do with Hy-Ko's patent infringement, unfair competition, or conversion and replevin claims. Hillman also requested that the Court order Hy-Ko to provide a more definite statement regarding its unfair competition claim. Briefing on Hillman's Motion to Dismiss was completed on September 14, 2021. On January 14, 2022, the Court denied Hillman’s motion. Hillman filed an answer with counterclaims (for declaratory judgment and for breach of a prior settlement agreement) on February 1, 2022 and Hy-Ko responded to that pleading on February 22, 2022.

The Court held a claim construction hearing on February 17, 2022. On March 10, 2022, the Court issued its claim construction order, and on March 24, 2022, Hillman filed objections to certain aspects of the claim construction order. Those objections were overruled by Order dated May 2, 2022. On April 11, 2022, Hy-Ko filed a notice withdrawing certain claims from its infringement contentions. On May 3, 2022, Hy-Ko filed a motion for judgment on the pleadings, seeking dismissal of certain Hillman counterclaims. The Court denied that motion by Order dated June 14, 2022. The parties conducted a mediation on June 28, 2022, with the mediator issuing a June 29, 2022 Report stating that the mediation has been suspended. The discovery deadline is July 22, 2022. Trial has been set for October 3, 2022.

Hillman believes Hy-Ko’s claims are without merit and that it has substantial defenses to Hy-Ko's claims.

8. Related Party Transactions:
The Company has recorded aggregate management fee charges and expenses from CCMP Capital Advisors, LLC and Oak Hill Funds of $88 and $214 for the thirteen and twenty-six weeks ended June 26, 2021. Subsequent to the Business Combination on July 14, 2021, the Company is no longer being charged management fees. See Note 3 - Merger Agreement for additional details on the Business Combination. Two members of our Board of Directors, Rich Zannino and Joe Scharfenberger, are partners at CCMP. Another director, Teresa Gendron, is the CFO of Jefferies.

At the Closing, Hillman, the Sponsors, CCMP Investors and the Oak Hill Investors entered into 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.

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, President and Chief Executive Officer of Ollie's, is a member of our Board of Directors. Sales to related parties were $334 and $497 in the thirteen and twenty-six weeks ended June 25, 2022, respectively. There were no such sales made in 2021.



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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
9. Income Taxes:

Accounting Standards Codification 740 (“ASC 740”) requires companies to apply their estimated annual effective tax rate on a year-to-date basis in each interim period. These rates are derived, in part, from expected annual pre-tax income or loss. In the thirteen and twenty-six weeks ended June 25, 2022 and the thirteen and twenty-six weeks ended June 26, 2021, the Company applied an estimated annual effective tax rate based on expected annual pre-tax income to the interim period pre-tax loss to calculate the income tax benefit.

For the thirteen and twenty-six weeks ended June 25, 2022, the effective income tax rate was 42.2% and 44.4%, respectively. The Company recorded an income tax provision for the thirteen weeks ended June 25, 2022 of $6,424 and an income tax provision for the twenty-six weeks ended June 25, 2022 of $5,532. The effective tax rate for the thirteen and twenty-six weeks ended June 25, 2022 was primarily the result of an estimated increase in Global intangible low-taxed income ("GILTI") from the Company's Canadian operations. Non-deductible stock compensation and state and foreign income taxes also contributed to an increase to the effective tax rate.

For the thirteen and twenty-six weeks ended June 26, 2021, the effective income tax rate was (73.0)% and 29.7%, respectively. The Company recorded an income tax provision for the thirteen weeks ended June 26, 2021 of $1,428, and an income tax benefit for the twenty-six weeks ended June 26, 2021 of $5,225. The effective tax rate for the thirteen and twenty-six weeks ended June 26, 2021 was the result of an estimated increase in GILTI from the Company's Canadian operations, state and foreign income taxes, non-deductible transaction expenses, and non-deductible stock compensation.


10. Long-Term Debt:

The following table summarizes the Company’s debt:
June 25, 2022 December 25, 2021
Revolving loans $ 117,000  $ 93,000 
Senior term loan, due 2028 846,745  851,000 
Finance leases 3,064  1,782 
966,809  945,782 
Unamortized discount on Senior term loan (5,480) (5,948)
Current portion of long-term debt and financing lease liabilities (11,860) (11,404)
Deferred finance fees (20,223) (21,899)
Total long-term debt, net $ 929,246  $ 906,531 

As of June 25, 2022, the ABL Revolver had an outstanding amount of $117,000 and outstanding letters of credit of $32,790. The Company has $100,210 of available borrowings under the revolving credit facility as a source of liquidity as of June 25, 2022.



11. 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 2032. 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.
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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)

The components of operating and finance lease costs for the thirteen and twenty-six weeks ended June 25, 2022 and thirteen and twenty-six weeks ended June 26, 2021 were as follows:
Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Operating lease costs $ 4,953  $ 5,149  $ 9,948  $ 10,243 
Short term lease costs 2,135  1,100  3,987  1,986 
Variable lease costs 551  453  877  757 
Finance lease costs:
Amortization of right of use assets 332  224  597  438 
Interest on lease liabilities 27  32  53  67 


Rent expense is recognized on a straight-line basis over the expected lease term. Rent expense totaled $7,639 and $14,812 in the thirteen and twenty-six weeks ended June 25, 2022, respectively, and $6,702 and $12,986 in the thirteen and twenty-six weeks ended June 26, 2021, respectively. Rent expense includes operating lease costs as well as expenses 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 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 were as follows as of June 25, 2022 and December 25, 2021:

June 25, 2022 December 25, 2021
Operating Leases Finance Leases Operating Leases Finance Leases
Weighted average remaining lease term 6.41 2.68 6.60 2.60
Weighted average discount rate 7.41% 3.53% 7.88% 5.59%


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HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
Supplemental balance sheet information related to the Company's finance leases was as follows as of June 25, 2022 and December 25, 2021:
June 25, 2022 December 25, 2021
Finance lease assets, net, included in property plant and equipment $ 3,052  $ 1,768 
Current portion of long-term debt 1,222  767 
Long-term debt, less current portion 1,842  1,015 
Total principal payable on finance leases $ 3,064  $ 1,782 

Supplemental cash flow information related to the Company's operating leases was as follows for the twenty-six weeks ended June 25, 2022 and twenty-six weeks ended June 26, 2021:

Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases $ 9,637  $ 9,778 
Operating cash outflow from finance leases 53  68 
Financing cash outflow from finance leases 556  460 

As of June 25, 2022, 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 June 25, 2022:
Operating Leases Finance Leases
Less than one year $ 18,280  $ 1,294 
1 to 2 years 16,554  1,129 
2 to 3 years 15,917  573 
3 to 4 years 14,909  163 
4 to 5 years 13,815  23 
After 5 years 24,136  4 
Total future minimum rental commitments 103,611  3,186 
Less - amounts representing interest (20,093) (122)
Present value of lease liabilities $ 83,518  $ 3,064 

In late 2022, the Company will have an additional operating lease for a new property located in Shannon, Georgia for the purposes of office, warehouse, and distribution. Occupancy has not yet commenced. The estimated future minimum rental commitments are approximately $26,721. Additionally in late 2022 the Company will have an operating lease for a new property located in Forest Park, Ohio to be used as office space. Occupancy has not yet commenced. The estimated future minimum rental commitments are approximately $4,282.

Lessor

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.


12. Equity and Accumulated Other Comprehensive Income:

Common Stock

Page 19 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
The Hillman Solutions Corp. has one class of common stock.

Accumulated Other Comprehensive Loss

The following is detail of the changes in the Company's accumulated other comprehensive loss from December 26, 2020 to June 25, 2022, including the effect of significant reclassifications out of accumulated other comprehensive income (loss) (net of tax):
Accumulated Other Comprehensive Loss
Balance at December 26, 2020 $ (29,388)
Other comprehensive income before reclassifications 1,849 
Amounts reclassified from other comprehensive income 385 
Net current period other comprehensive income 1
2,234 
Balance at December 25, 2021 (27,154)
Other comprehensive income before reclassifications 10,409 
Amounts reclassified from other comprehensive income 2
202 
Net current period other comprehensive income 10,611 
Balance at June 25, 2022
 $ (16,543)

1.During the year ended December 25, 2021, the Company obtained and amended its interest rate swap agreements to
hedge against effective cash flows (i.e. interest payments) on floating-rate debt associated with the Company's new Term Credit Agreement. In accordance with ASC 815, derivatives designated and that qualify as cash flow hedges of interest rate risk record the associated gain or loss within other comprehensive income. For the year ended December 25, 2021, the Company deferred a gain of $2,982, reclassified a loss of $385 and a net of tax of $850 into other comprehensive income due to hedging activities. The amounts reclassified out of other comprehensive income were recorded as interest expense. See Note 15 - Derivatives and Hedging for additional information on the interest rate swaps.
2.During the twenty-six weeks ended June 25, 2022, the Company deferred a gain of $15,201, reclassified a loss of $202 net of tax of $3,881 into other comprehensive income due to hedging activities. The amounts reclassified out of other comprehensive income were recorded as interest expense. See Note 15 - Derivatives and Hedging for additional information on the interest rate swaps.


13. Stock Based Compensation:

2014 Equity Incentive Plan

Following the Merger and in connection with the Business Combination described in Note 3 - Merger Agreement, Landcadia Holdings III, Inc. (“Landcadia”) became the direct parent company of Old Hillman and was renamed Hillman Solutions Corp. (“New Hillman”). Shares of Class A common stock of New Hillman (“New Hillman Shares”) are publicly traded on the Nasdaq Stock Market. Consequently, the outstanding stock options issued under the 2014 Equity Incentive Plan (the “Prior Plan”) prior to the Merger were converted and modified to purchase New Hillman Shares.

At the Closing, each outstanding option to acquire common stock of Hillman Holdco (a “Hillman Holdco Option”), whether vested or unvested, was assumed by New Hillman and converted into an option to purchase common stock of New Hillman (“New Hillman Option”) with substantially the same terms and conditions (including expiration date and exercise provisions) as applicable to the Hillman Holdco Option immediately prior to the Closing, except both the number of shares and the exercise price were modified using the conversion ratio at Closing. Each New Hillman Option is generally subject to the same vesting conditions as the Hillman Holdco Option from which it was converted, except that the performance-based vesting conditions of any Hillman Holdco Option granted prior to 2021 were adjusted such that the performance-based portion of the associated New Hillman Option will vest upon certain pre-established stock price hurdles. For all time based options and performance options granted during 2021, the change in fair value was immaterial and as such no additional compensation cost was recognized. For
Page 20 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
the performance options granted prior, the modification of the vesting criteria resulted in $11,482 of additional compensation expense, $8,228 of which was recognized in 2021 and $3,254 of which was recognized in twenty-six weeks ended June 25, 2022, respectively.

At the Closing, (i) each share of unvested restricted Hillman Holdco common stock was cancelled and converted into the right to receive a number of shares of New Hillman restricted stock equal to the Closing Stock Per Restricted Share Amount (as defined in the Merger Agreement) with substantially the same terms and conditions as were applicable to the related share of Hillman Holdco restricted stock immediately prior to the Closing (including with respect to vesting and termination-related provisions), and (ii) each Hillman Holdco restricted stock unit was assumed by New Hillman and converted into a New Hillman restricted stock unit award with substantially the same terms and conditions as were applicable to such Hillman Holdco restricted stock unit immediately prior to the Closing (including with respect to vesting and termination-related provisions).

Upon closing, the 2014 Equity Incentive Plan may grant options, stock appreciation rights, restricted stock, and other stock-based awards for up to an aggregate of 14,523,510 shares of its common stock.

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.

Restricted Stock
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.

Restricted Stock Units
The restricted stock units ("RSUs") granted to employees for service generally vest after three years, subject to continued employment. The RSUs granted to non-employee directors generally vest in full on the first anniversary of the grant date.

The 2014 Equity Incentive Plan had stock compensation expense of $1,258 and $6,355 recognized in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 25, 2022, respectively, and $1,796 and $3,537 in the thirteen and twenty-six weeks ended June 26, 2021, respectively.

2021 Equity Incentive Plan

Effective July 14, 2021, the Company established the 2021 Equity Incentive Plan. Under the 2021 Equity Incentive Plan (the “2021 Plan”), the maximum number of shares of common stock that may be delivered in satisfaction of awards under the 2021 Plan as of the Effective Date is (i) 7,150,814 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 common stock in the aggregate).

Restricted Stock Units
The RSUs granted to employees for service generally vest after three years, subject to continued employment. The RSUs granted to non-employee directors generally vest in full on the sooner of (1) the first anniversary of the grant date; or (2) the next annual meeting of stockholders.

The 2021 Equity Incentive Plan had stock compensation expense of $943 and $1,786 recognized in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 25, 2022, respectively.

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. 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. Options to purchase shares are granted four times a year
Page 21 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
on the first payroll date in January, April, July, and October of each year and ending 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. The first option period began on January 1, 2022 and the first purchase was made in April of 2022.

Compensation expense associated with ESPP purchase rights is recognized on a straight-line basis over the vesting period. As of the thirteen and twenty-six weeks ended June 25, 2022, there was approximately $85 and $163, respectively, of compensation expense related to the ESPP.



14. 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 units, 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):

Thirteen weeks ended June 25, 2022 Twenty-six weeks ended June 25, 2022
Earnings
(Numerator)		 Shares
(Denominator)		 Per Share
Amount		 Earnings
(Numerator)		 Shares
(Denominator)		 Per Share
Amount
Net income $ 8,816  194,135  $ 0.05  $ 6,929  194,071  $ 0.04 
Dilutive effect of stock options and awards —  2,551  —  —  1,861  — 
Net income per diluted common share $ 8,816  196,686  $ 0.04  $ 6,929  195,932  $ 0.04 

Thirteen weeks ended June 26, 2021 Twenty-six weeks ended June 26, 2021
Earnings
(Numerator)		 Shares
(Denominator)		 Per Share
Amount		 Earnings
(Numerator)		 Shares
(Denominator)		 Per Share
Amount
Net loss $ (3,385) 91,217  $ (0.04) $ (12,355) 91,266  $ (0.14)
Dilutive effect of stock options and awards —  —  —  —  —  — 
Net loss per diluted common share $ (3,385) 91,217  $ (0.04) $ (12,355) 91,266  $ (0.14)

Stock options and awards outstanding totaling 1,492 and 1,803 were excluded from the computation for the thirteen and twenty-six weeks ended June 25, 2022 and 1,638 and 2,281 for the thirteen and twenty-six weeks ended June 26, 2021, respectively, as they would have had an antidilutive effect under the treasury stock method.



15. 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: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items, and (c) 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.
Page 22 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
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 January 8, 2018, the Company entered into a forward Interest Rate Swap Agreement ("2018 Swap 1") with three-year terms for a notional amount of $90,000. The forward start date of the 2018 Swap 1 was September 30, 2018 and the termination date was June 30, 2021. The 2018 Swap 1 has a determined interest rate of 2.3%. The 2018 Swap 1 was terminated on June 30, 2021. In accordance with ASC 815, the 2018 Swap 1 was not designated as a cash flow hedge and therefore changes in fair value were recorded in (Gain) loss on mark-to-market adjustments on the Company's Statements of Comprehensive Income (Loss).
On November 8, 2018, the Company entered into another new forward Interest Rate Swap Agreement ("2018 Swap 2") for $60,000 notional amount. The forward start date of the 2018 Swap 2 was November 30, 2018 and the termination date is November 30, 2022. The 2018 Swap 2 has a pay fixed interest rate of 3.1%. The 2018 Swap 2 was effectively terminated on July 16, 2021 in connection with the Merger as described in Note 3 - Merger Agreement. In accordance with ASC 815, the 2018 Swap 2 was not designated as a cash flow hedge and therefore changes in fair value were recorded in (Gain) loss on mark-to-market adjustments on the Company's Statement of Comprehensive Income (Loss).
On July 9, 2021, the Company entered into an interest swap agreement ("2021 Swap 1") for a notional amount of $144,000. The forward start date of the 2021 Swap 1 was July 30, 2021 and the termination date is July 31, 2024. The 2021 Swap 1 has a determined pay fixed interest rate of 0.75%. In accordance with ASC 815, the Company determined the 2021 Swap 1 constituted an effective cash flow hedge and therefore changes in fair value are recorded within other comprehensive income within the Company's Statement of Comprehensive Income (Loss) and the deferred gains or losses are reclassified out of Other comprehensive income into interest expense in the same period during which the hedged transactions affect earnings.
On July 9, 2021, the Company entered into an interest swap agreement ("2021 Swap 2") for a notional amount of $216,000. The forward start date of the 2021 Swap 2 was July 30, 2021 and the termination date is July 31, 2024. The 2021 Swap 2 has a determined pay fixed interest rate of 0.76%. In accordance with ASC 815, the Company determined the 2021 Swap 2 constituted an effective cash flow hedge and therefore changes in fair value are recorded within other comprehensive income within the Company's Statement of Comprehensive Income (Loss) and the deferred gains or losses are reclassified out of Other comprehensive income into interest expense in the same period during which the hedged transactions affect earnings.
On July 16, 2021, the Company modified its original 2018 Swap 2 derivative instrument ("2021 Swap 3") for a notional amount of $60,000. The forward start date of the 2021 Swap 3 was July 30, 2021 and the termination date is November 30, 2022. The 2021 Swap 3 has a determined pay fixed interest rate of 3.63%. In accordance with ASC 815, the Company determined the 2021 Swap 3 constituted an effective cash flow hedge and therefore changes in fair value are recorded within accumulated other comprehensive loss within the Company's Consolidated Balance Sheets and the deferred gains or losses are reclassified out of other comprehensive income into interest expense in the same period during which the hedged transactions affect earnings. Due to an other-than-insignificant financing element from the modification, the swap entered into during 2021 is considered a hybrid instrument, with a financing component treated as a debt instrument with an embedded at-market derivative. Within the Company’s Condensed Consolidated Balance Sheets, the financing components are carried at amortized cost and the embedded at-market derivatives are carried at fair value.
Page 23 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
The following table summarizes the Company's derivatives financial instruments:
Asset Derivatives Liability Derivatives
As of
June 25, 2022
As of
December 25, 2021
As of
June 25, 2022
As of
December 25, 2021
Balance Sheet
Location		 Fair Value Fair Value Balance Sheet
Location		 Fair Value Fair Value
Derivatives designated as hedging instruments:
2021 Swap 1 Other current assets/other assets $ 7,307  $ 1,513  Other accrued expenses $ —  $ (170)
2021 Swap 2 Other current assets/other assets 10,951  2,250  Other accrued liabilities —  (270)
2021 Swap 3 Other current/other non-current assets 518  59  Other accrued liabilities/other non-current liabilities (926) (1,880)
Total hedging instruments $ 18,776  $ 3,822  $ (926) $ (2,320)
Additional information with respect to the fair value of derivative instruments is included in Note 16 - Fair Value Measurements.

16. 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.
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 June 25, 2022
  Level 1 Level 2 Level 3 Total
Trading securities $ 1,283  $ —  $ —  $ 1,283 
Interest rate swaps —  17,850  —  17,850 
Contingent consideration payable —  —  (8,598) (8,598)
  As of December 25, 2021
  Level 1 Level 2 Level 3 Total
Trading securities $ 1,686  $ —  $ —  $ 1,686 
Interest rate swaps —  1,502  —  1,502 
Contingent consideration payable —  —  (12,347) (12,347)

Page 24 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
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 Other assets on the accompanying Condensed 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 June 25, 2022 and December 25, 2021, the Company's interest rate swaps were recorded on the accompanying Condensed Consolidated Balance Sheets in accordance with ASC 815.

The contingent consideration represents future potential earn-out payments related to the Resharp acquisition in fiscal 2019 and the Instafob acquisition in the first quarter of 2020. 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. As of June 25, 2022, the total contingent consideration was recorded as $780 in other accrued expenses and $7,818 in other non-current liabilities on the Condensed Consolidated Balance Sheets, in addition to $103 in payments made during the quarter. As of December 25, 2021, the total contingent consideration was recorded as $476 in other accrued expenses and $11,871 in other non-current liabilities on the Condensed Consolidated Balance Sheets in addition to $36 of payments made during the year. As of June 25, 2022, compared to December 25, 2021, the Company recorded a $3,349 and $297 decrease in the Resharp and Instafob contingent consideration liability, respectively. The total $3,646 gain on the revaluation was determined by using a simulation model of the Monte Carlo analysis that included updated projections applicable to the liability as of June 25, 2022 compared to the prior valuation period and was recorded within other income in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Cash, accounts receivable, short-term borrowings and accounts payable are reflected in the Condensed Consolidated Balance Sheets 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 June 25, 2022 and December 25, 2021 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 June 25, 2022 and December 25, 2021 because, while subject to a minimum LIBOR 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 15 - Derivatives and Hedging.


17. Segment Reporting:

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 periodically evaluates its segment reporting structure in accordance with ASC 350-20-55 and has concluded that it has three reportable segments as of June 25, 2022: Hardware and Protective Solutions, Robotics and Digital Solutions, and Canada. The Company evaluates the performance of its segments based on revenue and income (loss) from operations, and does not include segment assets nor non-operating income/expense items for management reporting purposes.

Page 25 
HILLMAN SOLUTIONS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
The table below presents revenues and income (loss) from operations for our reportable segments for the thirteen and twenty-six weeks ended June 25, 2022 and thirteen and twenty-six weeks ended June 26, 2021.

 
Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Revenues
Hardware and Protective Solutions $ 279,842  $ 263,129  $ 546,257  $ 514,058 
Robotics and Digital Solutions 64,776  66,351  126,584  122,230 
Canada 49,496  46,235  84,286  80,708 
Total revenues $ 394,114  $ 375,715  $ 757,127  $ 716,996 
Segment income (loss) from operations
Hardware and Protective Solutions $ 10,538  $ 9,995  $ 8,142  $ 16,045 
Robotics and Digital Solutions 10,437  6,546  18,292  6,700 
Canada 6,798  2,968  10,188  2,544 
Total income (loss) from operations $ 27,773  $ 19,509  $ 36,622  $ 25,289 


18. Subsequent Events

On July 29, 2022, subsequent to quarter end, the Company amended the asset-based revolving credit agreement (the “ABL Revolver") with Barclays Bank PLC, as administrative agent, and the lenders and other parties thereto (the “ABL Credit Agreement”), increasing the aggregate commitments thereunder to $375,000 and extended the maturity. 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 a Canadian banker’s acceptance rate 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. 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 The Hillman Companies, Inc., a wholly‑owned subsidiary of the Company, 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 has guaranteed by the Canadian portion under the ABL Credit Agreement.
Page 26 

Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion provides information which the Company’s management believes is relevant to an assessment and understanding of the Company’s operations and financial condition. This discussion should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying notes in addition to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 25, 2021.

Forward-Looking Statements

This quarterly report contains certain forward-looking statements, including, but not limited to, certain disclosures related to acquisitions, refinancing, capital expenditures, resolution of pending litigation, and realization of deferred tax assets, which are not historical facts and are subject to numerous assumptions, risks, and uncertainties. Statements that do not describe historical or current facts, including statements about beliefs and expectations, are forward-looking statements.

All forward-looking statements 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) ability to continue to innovate with new products and services; (5) seasonality; (6) large customer concentration; (7) ability to recruit and retain qualified employees; (8) the outcome of any legal proceedings that may be instituted against the Company (9) adverse changes in currency exchange rates; (10) the impact of COVID-19 on the Company’s business; or (11) 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 on March 16, 2022. 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.

General

Hillman Solutions Corp. and its wholly-owned subsidiaries (collectively, “Hillman” or “Company”) are one of the largest providers of hardware-related products and related merchandising services to retail markets in North America. Our principal business is operated through our wholly-owned subsidiary, The Hillman Group, Inc. and its wholly-owned subsidiaries (collectively, “Hillman Group”). Hillman Group sells its products to hardware stores, home centers, mass merchants, pet supply stores, and other retail outlets principally in the United States, Canada, Mexico, Latin America, and the Caribbean. Product lines include thousands of small parts such as fasteners and related hardware items; threaded rod and metal shapes; keys and accessories; builder's hardware; personal protective equipment, such as gloves and eye-wear; and identification items, such as tags and letters, numbers, and signs. We support product sales with services that include design and installation of merchandising systems, maintenance of appropriate in-store inventory levels, and break-fix for our robotics kiosks.

Our headquarters are located at 10590 Hamilton Avenue, Cincinnati, Ohio. We maintain a website at www.hillmangroup.com.
Information contained or linked on our website is not incorporated by reference into this quarterly report and should not be
considered a part of this quarterly report.
Page 27 


On July 14, 2021, privately held HMAN Group Holdings Inc. ("Old Hillman"), and Landcadia Holdings III, Inc. (“Landcadia” and after the Business Combination described herein, “New Hillman”), a special purpose acquisition company ("SPAC") consummated the previously announced Business Combination (the “Closing”) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 24, 2021 (as amended on March 12, 2021, the "Merger Agreement”). Unless the context indicates otherwise, the discussion of the Company and its financial condition and results of operations is with respect to New Hillman following the closing date and Old Hillman prior to the closing date. See Note 1 - Basis of Presentation of the Notes to Condensed Consolidated Financial Statements for additional information.

In connection with the Closing, the Company entered into a new credit agreement with Jefferies Finance LLC, as administrative agent, and the lenders and other parties thereto (the “Term Credit Agreement”), which provided for a new funded term loan facility of $835.0 million and a delayed draw term loan facility of $200.0 million (of which $16.0 million was drawn). The Company also entered into an amendment to their existing asset-based revolving credit agreement (the “ABL Amendment”) with Barclays Bank PLC, as administrative agent, and the lenders and other parties thereto (the “ABL Credit Agreement”), increasing the aggregate commitments thereunder to $250.0 million, extended the maturity and conformed certain provisions to the Term Credit Agreement. The proceeds of the funded term loans under the Term Credit Agreement and revolving credit loans under the ABL Credit Agreement were used, together with other available cash, to (1) refinance in full all outstanding term loans and to terminate all outstanding commitments under the credit agreement, dated as of May 31, 2018, (2) refinance outstanding revolving credit loans, and (3) redeem in full senior notes due July 15, 2022 (the “6.375% Senior Notes”).

In anticipation of the Business Combination and the refinancing described above, on July 13, 2021, the Company delivered a notice to redeem in full 11.6% Junior Subordinated Debentures due September 30, 2027 (the “Junior Subordinated Debentures”) issued under the Indenture, dated as of September 5, 1997 (as amended and supplemented, the “Debentures Indenture”), between The Hillman Companies and The Bank of New York Mellon, a New York banking corporation, as Trustee (the “Trustee”) and deposited an amount with the Trustee sufficient to satisfy and discharge the Debentures Indenture, which is no longer in effect. Notices to redeem 4,217,837 trust preferred securities (the “Trust Preferred Securities”) issued in a public offering by the Hillman Group Capital Trust ("Trust") and 130,449 of trust common securities (the “Trust Common Securities”) issued by the Trust to Hillman Companies were also delivered on July 13, 2021. Upon the payment of the redemption price for the Debentures on August 12, 2021, the Trust redeemed the Trust Preferred Securities and the Trust Common Securities, which as of August 12, 2021 was no longer be deemed to be outstanding. The last day of trading for the Trust Preferred Securities on the New York Stock Exchange (the “NYSE”) was August 11, 2021 and the Company voluntarily delisted the Trust Preferred Securities from the NYSE.

On April 16, 2021, the Company completed the acquisition of Oz Post International, LLC ("OZCO"), a leading manufacturer of superior quality hardware that offers structural fasteners and connectors used for decks, fences and other outdoor structures, for a total purchase price of $39.8 million. The Company entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018 (the "2018 Term Loan"), which provided $35.0 million of incremental term loan funds to be used to finance the acquisition. Refer to Note 5 - Acquisitions of the Condensed Consolidated Financial Statements for additional information.

On March 7, 2022 the Company completed its acquisition of the Irvine, California-based Monkey Hook, LLC ("Monkey Hook") for a total purchase price of $2.8 million, which includes $0.3 million in holdback that remains payable to the seller. Monkey Hook products are designed to hang artwork on drywall where no stud is present. Monkey Hook sells its products throughout North America and its financial results reside in the Company's Hardware and Protective Solutions reportable segment.


Current Economic Conditions

Our business is impacted by general economic conditions in the North American and international markets, particularly the U.S. and Canadian retail markets including hardware stores, home centers, mass merchants, and other retailers.
We are exposed to the risk of unfavorable changes in foreign currency exchange rates for the U.S. dollar versus local currency of our suppliers located primarily in China and Taiwan. We purchase a significant variety of our products for resale from multiple vendors located in China and Taiwan. The purchase price of these products is routinely negotiated in U.S. dollar amounts rather than the local currency of the vendors and our suppliers' profit margins decrease when the U.S. dollar declines in
Page 28 

value relative to the local currency. This puts pressure on our suppliers to increase prices to us. The U.S. dollar declined in value relative to the CNY by approximately 6.5% in 2020, declined by 2.6% in 2021, and increased by 5.0% during the twenty-six weeks ended June 25, 2022. The U.S. dollar declined in value relative to the Taiwan dollar by approximately 7.9% in 2020, declined by 1.4% in 2021, and increased by 7.1% during the twenty-six weeks ended June 25, 2022.
In addition, the negotiated purchase price of our products may be dependent upon market fluctuations in the cost of raw materials such as steel, zinc, and nickel used by our vendors in their manufacturing processes. The final purchase cost of our products may also be dependent upon inflation or deflation in the local economies of vendors in China and Taiwan that could impact the cost of labor used in the manufacturing of our products. We identify the directional impact of changes in our product cost, but the quantification of each of these variable impacts cannot be measured as to the individual impact on our product cost with a sufficient level of precision.

Further we are exposed to transportation risk for imported products as well as the transportation and fuel costs associated with our U.S. distribution network. Increasing transportation costs increase our product cost and require us to increase price on the impacted products.
We are also exposed to risk of unfavorable changes in the Canadian dollar exchange rate versus the U.S. dollar. Our sales in Canada are denominated in Canadian dollars while a majority of the products are sourced in U.S. dollars. A weakening of the Canadian dollar versus the U.S. dollar results in lower sales in terms of U.S. dollars while the cost of sales remains unchanged. We have a practice of hedging some of our Canadian subsidiary's purchases denominated in U.S. dollars. The U.S. dollar declined in value relative to the Canadian dollar by approximately 1.9% in 2020, declined by 0.2% in 2021, and declined by 1.4% during the twenty-six weeks ended June 25, 2022. We may take pricing action, when warranted, in an attempt to offset a portion of product cost increases. The ability of our operating divisions to institute price increases and seek price concessions, as appropriate, is dependent on competitive market conditions.
We import large quantities of products which are subject to customs requirements and to tariffs and quotas set by governments through mutual agreements and bilateral actions. The U.S. tariffs on steel and aluminum and other imported goods has increased our product costs and required us to increase prices on the affected products.

Results of Operations
The following analysis of results of operations includes a brief discussion of the factors that affected our operating results and a comparative analysis of the thirteen weeks ended June 25, 2022 and the thirteen weeks ended June 26, 2021.
Page 29 

Thirteen weeks ended June 25, 2022 vs the Thirteen weeks ended June 26, 2021

  Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021
(dollars in thousands) Amount % of
Net Sales		 Amount % of
Net Sales
Net sales $ 394,114  100.0  % $ 375,715  100.0  %
Cost of sales (exclusive of depreciation and amortization shown separately below) 220,146  55.9  % 215,967  57.5  %
Selling, general and administrative expenses 118,229  30.0  % 111,662  29.7  %
Depreciation 14,172  3.6  % 15,270  4.1  %
Amortization 15,566  3.9  % 15,414  4.1  %
Other (income) expense (1,772) (0.4) % (2,107) (0.6) %
Income from operations 27,773  7.0  % 19,509  5.2  %
Interest expense, net of investment income 12,533  3.2  % 22,217  5.9  %
Mark-to-market adjustment of interest rate swap —  —  % (751) (0.2) %
Income (loss) before income taxes 15,240  3.9  % (1,957) (0.5) %
Income tax expense (benefit) 6,424  1.6  % 1,428  0.4  %
Net income (loss) $ 8,816  2.2  % $ (3,385) (0.9) %
Adjusted EBITDA(1)
$ 62,276  15.8  % $ 64,472  17.2  %
(1)Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
Net Sales
Net sales for the thirteen weeks ended June 25, 2022 were $394.1 million, an increase of approximately $18.4 million compared to net sales of $375.7 million for the thirteen weeks ended June 26, 2021. Fastening and hardware sales increased $24.2 million driven by $33.6 million in price increases in response to inflationary pressures, partially offset by decreased volume driven by lower demand. Sales in Canada increased $3.3 million primarily driven by approximately $8.4 million in price increases partially offset by decreased volume driven by lower demand. Partially offsetting these increases, sales of protective products decreased by $7.5 million due to lower promotional sales and retail softness.
Cost of Sales
Our cost of sales ("COS") was $220.1 million, or 55.9% of net sales, in the thirteen weeks ended June 25, 2022, an increase of approximately $4.2 million compared to $216.0 million, or 57.5% of net sales, in the thirteen weeks ended June 26, 2021. Cost of sales as a percentage of net sales in the thirteen weeks ended June 25, 2022 decreased (1.6)% in the thirteen weeks ended June 26, 2021 primarily due to $2.6 million of additional expense in the thirteen weeks ended June 26, 2021 for anti-dumping duties associated with prior year inventory purchases. Additionally, net sales were reduced by $1.4 million in the thirteen weeks ended June 26, 2021 for payments made to customers associated with the new product line roll outs.

Expenses
Selling, general, and administrative ("SG&A") expenses were approximately $118.2 million in the thirteen weeks ended June 25, 2022, an increase of approximately $6.6 million, compared to $111.7 million in the thirteen weeks ended June 26, 2021. The following changes in underlying trends impacted the change in operating expenses:

•Selling expense was $44.8 million in the thirteen weeks ended June 25, 2022, an increase of $4.8 million compared to $40.0 million in the second quarter of 2021. The increase in selling expense was primarily due to increased marketing, variable compensation, and travel and entertainment expense in the thirteen weeks ended June 25, 2022.

Page 30 

•Warehouse and delivery expenses were $48.7 million in the thirteen weeks ended June 25, 2022, an increase of $4.5 million compared to $44.2 million in the thirteen weeks ended June 26, 2021. The additional expense was primarily driven by inflation in wages, fuel, and transportation costs.

•General and administrative (“G&A”) expenses were $24.7 million in the thirteen weeks ended June 25, 2022, a decrease of $2.7 million compared to $27.4 million in the thirteen weeks ended June 26, 2021. The $2.7 million decrease was primarily due to lower legal and consulting expense associated with the merger with Landcadia along with decreased legal fees associated with our litigation with KeyMe in the prior year and Hy-Ko in the current year (see Note 7 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information).

Depreciation expense was $14.2 million in the thirteen weeks ended June 25, 2022 compared to depreciation expense of $15.3 million in the thirteen weeks ended June 26, 2021. The decrease was due to certain assets becoming fully depreciated. Amortization expense was $15.6 million in the thirteen weeks ended June 25, 2022 which was comparable to $15.4 million in the thirteen weeks ended June 26, 2021.

Other (income) expense was $(1.8) million in the thirteen weeks ended June 25, 2022 compared to other (income) expense of $(2.1) million in the thirteen weeks ended June 26, 2021. Other income in the thirteen weeks ended June 25, 2022 was primarily comprised of a $2.2 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob (see Note 16 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) partially offset by of exchange rate losses of $0.2 million. In the thirteen weeks ended June 26, 2021 other income consisted primarily of $1.2 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob along with exchange rate gains of $0.9 million.

Twenty-six weeks ended June 25, 2022 vs the Twenty-six weeks ended June 26, 2021


  Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
(dollars in thousands) Amount % of
Net Sales		 Amount % of
Net Sales
Net sales $ 757,127  100.0  % $ 716,996  100.0  %
Cost of sales (exclusive of depreciation and amortization shown separately below) 433,419  57.2  % 417,265  58.2  %
Selling, general and administrative expenses 232,767  30.7  % 214,841  30.0  %
Depreciation 27,426  3.6  % 31,611  4.4  %
Amortization 31,087  4.1  % 30,323  4.2  %
Other (income) expense (4,194) (0.6) % (2,333) (0.3) %
(Loss) income from operations 36,622  4.8  % 25,289  3.5  %
Interest expense, net of investment income 24,161  3.2  % 44,293  6.2  %
Mark-to-market adjustment of interest rate swap —  —  % (1,424) (0.2) %
Income (loss) before income taxes 12,461  1.6  % (17,580) (2.5) %
Income tax expense (benefit) 5,532  0.7  % (5,225) (0.7) %
Net income (loss) $ 6,929  0.9  % $ (12,355) (1.7) %
Adjusted EBITDA(1)
$ 106,287  14.0  % $ 112,278  15.7  %

Net Sales
Net sales for the twenty-six weeks ended June 25, 2022 were $757.1 million, an increase of approximately $40.1 million compared to net sales of $717.0 million for the twenty-six weeks ended June 26, 2021. Sales of hardware products increased by $46.9 million driven by $56.0 million in price increases in response to inflationary pressures in the market, partially offset by
Page 31 

decreased volume driven by lower demand. Net sales in our Canada operating segment increased by $3.6 million primarily driven $14.7 million in price increases partially offset by decreased volume driven by lower demand. Sales of personal protective equipment decreased by $14.7 million due to lower demand for COVID-19 protective and cleaning products in the second quarter of 2022, partially offset by price increases of $4.7 million.
Cost of Sales
Our cost of sales was $433.4 million, or 57.2% of net sales, in the twenty-six weeks ended June 25, 2022, an increase of approximately $16.2 million compared to $417.3 million, or 58.2% of net sales, in the twenty-six weeks ended June 26, 2021. The decrease of 1.0% in cost of sales, expressed as a percent of net sales, in 2022 compared to the twenty-six weeks ended June 26, 2021 was primarily due to $2.6 million of additional expense in the twenty-six weeks ended June 26, 2021 for anti-dumping duties associated with prior year inventory purchases. Additionally, net sales were reduced by $1.4 million in the twenty-six weeks ended June 26, 2021 for payments made to customers associated with the new product line roll outs.
Expenses
Selling, general, and administrative ("SG&A") expenses were approximately $232.8 million in the twenty-six weeks ended June 25, 2022, an increase of approximately $17.9 million, compared to $214.8 million in the twenty-six weeks ended June 26, 2021. The following changes in underlying trends impacted the change in operating expenses:

•Selling expense was $87.5 million in the twenty-six weeks ended June 25, 2022, an increase of $10.1 million compared to $77.4 million in the twenty-six weeks ended June 26, 2021. The increase in selling expense was primarily due to increased marketing, variable compensation, and travel and entertainment expense in the twenty-six weeks ended June 25, 2022.

•Warehouse and delivery expenses were $93.7 million in the twenty-six weeks ended June 25, 2022, an increase of $9.3 million compared to $84.4 million in the twenty-six weeks ended June 26, 2021. The additional expense was primarily driven by higher sales volume and inflation.

•General and administrative (“G&A”) expenses were $51.6 million in the twenty-six weeks ended June 25, 2022, a decrease of $1.4 million compared to $53.0 million in the twenty-six weeks ended June 26, 2021. In the twenty-six weeks ended June 26, 2021 we incurred higher legal and consulting expense associated with the merger with Landcadia along with increased legal fees associated with our litigation with KeyMe (see Note 7 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information).

Depreciation expense was $27.4 million in the twenty-six weeks ended June 25, 2022 compared to depreciation expense of $31.6 million in the twenty-six weeks ended June 26, 2021. The decrease was due to certain assets becoming fully depreciated. Amortization expense was $31.1 million in the twenty-six weeks ended June 25, 2022 which was comparable to $30.3 million in the twenty-six weeks ended June 26, 2021. The increase was primarily driven by the acquisitions of Ozco and Monkey Hook (see Note 5 - Acquisitions of the Notes to Condensed Consolidated Financial Statements for additional information).

Other (income) expense was $(4.2) million in the twenty-six weeks ended June 25, 2022 compared to $(2.3) million in the twenty-six weeks ended June 26, 2021. Other (income) expense in the twenty-six weeks ended June 25, 2022 was comprised primarily of a $3.6 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob, (see Note 16 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) along with exchange rate gains of $0.5 million. In the twenty-six weeks ended June 26, 2021 other income was primarily comprised of exchange rate gains of $1.5 million along with a $1.2 million gain on the revaluation of the contingent consideration associated with the acquisition of Resharp, (see Note 16 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information).
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Results of Operations – Operating Segments

The following tables provides supplemental information regarding our net sales and profitability by operating segment for the thirteen and twenty-six weeks ended June 25, 2022 and the thirteen and twenty-six weeks ended June 26, 2021 (dollars in thousands):
 
Hardware and Protective Solutions

  Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Hardware and Protective Solutions
Segment Revenues $ 279,842  $ 263,129  $ 546,257  $ 514,058 
Segment Income from operations 10,538  9,995  8,142  16,045 
Adjusted EBITDA(1)
31,292  36,114  51,875  65,146 
(1)Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
Thirteen weeks ended June 25, 2022 vs the Thirteen weeks ended June 26, 2021
Net Sales

Net sales for our Hardware and Protective Solutions operating segment increased by $16.7 million in thirteen weeks ended June 25, 2022 to $279.8 million as compared to $263.1 million in the thirteen weeks ended June 26, 2021. Fastening and hardware sales increased by $24.2 million driven by $33.6 million in price increases in response to inflationary pressures in the market, partially offset by decreased volume driven by lower demand. This increase was partially offset by sales of protective products which decreased by $7.5 million due to lower promotional sales and retail softness in the early spring of 2022.

Income from Operations

Income from operations of our Hardware and Protective Solutions operating segment increased by approximately $0.5 million in the thirteen weeks ended June 25, 2022 to $10.5 million from $10.0 million in the thirteen weeks ended June 26, 2021. The increase in sales was partially offset by increased expenses:

•Driven primarily by inflation, cost of sales increased by approximately $7.8 million in the thirteen weeks ended June 25, 2022 to $172.5 million as compared to $164.7 million in the thirteen weeks ended June 26, 2021. Cost of sales as a percentage of net sales was 61.6% in the thirteen weeks ended June 25, 2022, a decrease of 1% from 62.6% in the thirteen weeks ended June 26, 2021. The decrease in cost of sales as a percentage of net sales was primarily due to $2.6 million of additional expense in the thirteen weeks ended June 26, 2021 for anti-dumping duties associated with prior year inventory purchases. Additionally, net sales was reduced by $1.4 million in the thirteen weeks ended June 26, 2021 for payments made to customers associated with the new product line roll outs.
•Selling expense increased $3.4 million in the thirteen weeks ended June 25, 2022 compared to the thirteen weeks ended June 26, 2021 primarily due to increased marketing, variable compensation, and travel and entertainment expense.
•Warehouse expense increased $4.6 million in the thirteen weeks ended June 25, 2022 compared to the thirteen weeks ended June 26, 2021. The additional expense was primarily driven by inflation in wages, fuel, and transportation costs.

Twenty-six weeks ended June 25, 2022 vs the Twenty-six weeks ended June 26, 2021

Net Sales

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Net sales for our Hardware and Protective Solutions operating segment increased by $32.2 million in the twenty-six weeks ended June 25, 2022 to $546.3 million as compared to $514.1 million in the twenty-six weeks ended June 26, 2021. Sales of hardware products increased by $46.9 million driven by $56.0 million in price increases in response to inflationary pressures in the market related to the cost of products, inbound and outbound transportation costs, and personnel costs, partially offset by decreased volume driven by lower demand. Sales of personal protective equipment decreased by $14.7 million due to lower demand for COVID-19 protective and cleaning products in the 2022, partially offset by price increases of $4.7 million.

Income from Operations

Income from operations of our Hardware and Protective Solutions operating segment decreased by approximately $7.9 million in the twenty-six weeks ended June 25, 2022 to $8.1 million as compared to $16.0 million in the twenty-six weeks ended June 26, 2021. The decrease was driven by increased expenses:

•Cost of sales increased by approximately $20.1 million in the twenty-six weeks ended June 25, 2022 to $345.2 million as compared to $325.1 million in the twenty-six weeks ended June 26, 2021. Cost of sales as a percentage of net sales was comparable to the prior year period at 63.2%.
•Selling expense increased $7.5 million in the twenty-six weeks ended June 25, 2022 compared to the twenty-six weeks ended June 26, 2021 primarily due to increased marketing, variable compensation, and travel and entertainment expense.
•Warehouse expense increased $9.2 million in the twenty-six weeks ended June 25, 2022 compared to the twenty-six weeks ended June 26, 2021. The additional expense was primarily driven by higher sales volume and inflation.
•G&A expense increased $3.1 million in the twenty-six weeks ended June 25, 2022 compared to the twenty-six weeks ended June 26, 2021. The additional expense was primarily due to increased stock compensation expense in connection with modification of awards associated with the Merger.

Robotics and Digital Solutions
  Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Robotics and Digital Solutions
Revenues $ 64,776  $ 66,351  $ 126,584  $ 122,230 
Segment income from operations 10,437  6,546  18,292  6,700 
Adjusted EBITDA(1)
22,334  23,696  41,208  41,113 
(1)Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.
Thirteen weeks ended June 25, 2022 vs the Thirteen weeks ended June 26, 2021
Net Sales

Net sales in our Robotics and Digital Solutions operating segment decreased by $1.6 million in the thirteen weeks ended June 25, 2022 to $64.8 million as compared to $66.4 million in the thirteen weeks ended June 26, 2021. The decreased sales were primarily due to a decrease of $0.5 million in keys sales along with a decrease of $1.1 million in engraving. Key and engraving sales in the second quarter of 2022 were negatively impacted by lower retail foot traffic.

Income from Operations
Income from operations of our Robotics and Digital Solutions operating segment increased by approximately $3.9 million in the thirteen weeks ended June 25, 2022 to $10.4 million as compared to $6.5 million in the thirteen weeks ended June 26, 2021. The increase was primarily due to lower legal fees associated with our litigation with KeyMe in the prior year and Hy-Ko in the current year (see Note 7 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information). We also recorded a $2.2 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob in the thirteen weeks ended June 25, 2022, (see Note 16 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) as compared to a $1.2 million gain in the thirteen weeks ended June 26, 2021.
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Twenty-six weeks ended June 25, 2022 vs the Twenty-six weeks ended June 26, 2021
Net Sales

Net sales in our Robotics and Digital Solutions operating segment increased by $4.4 million in the twenty-six weeks ended June 25, 2022 to $126.6 million as compared to $122.2 million in the twenty-six weeks ended June 26, 2021. The increased sales were primarily due to an increase of $5.8 million in keys sales partially offset by a decrease of $1.5 million in engraving sales. Key sales in the twenty-six weeks ended June 26, 2021 were negatively impacted by low retail foot traffic and limited access to key machines in 2021 due to COVID-19.

Income from Operations
Income from operations of our Robotics and Digital Solutions operating segment increased by approximately $11.6 million in the twenty-six weeks ended June 25, 2022 to $18.3 million as compared to $6.7 million in the twenty-six weeks ended June 26, 2021. The increase was primarily due decreased legal and consulting expense associated with the merger with Landcadia along with lower legal fees associated with our litigation with HyKo and KeyMe (see Note 7 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information. We also recorded a $3.6 million gain on the revaluation of the contingent consideration associated with the acquisitions of Resharp and Instafob in the twenty-six weeks ended June 25, 2022 (see Note 16 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information) as compared to a $1.2 million gain in 2021.


Canada
  Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Canada
Revenues $ 49,496  $ 46,235  $ 84,286  $ 80,708 
Segment income (loss) from operations 6,798  2,968  10,188  2,544 
Adjusted EBITDA(1)
8,650  4,662  13,204  6,019 
(1)Adjusted EBITDA is a non-GAAP financial measure. Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of Adjusted EBITDA, and for a reconciliation from net income to Adjusted EBITDA.

Thirteen weeks ended June 25, 2022 vs the Thirteen weeks ended June 26, 2021
Net Sales

Net sales in our Canada operating segment increased by $3.3 million in the thirteen weeks ended June 25, 2022 to $49.5 million as compared to $46.2 million in the thirteen weeks ended June 26, 2021 driven by $8.4 million in price increases in response to inflationary pressures partially offset by decreased volume driven by lower demand.

Income from Operations

Income from operations of our Canada operating segment increased by approximately $3.8 million in the thirteen weeks ended June 25, 2022 to $6.8 million as compared to $3.0 million in the thirteen weeks ended June 26, 2021. The increased sales along with improved product margins led to the increase in operating income.
Twenty-six weeks ended June 25, 2022 vs the Twenty-six weeks ended June 26, 2021
Net Sales

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Net sales in our Canada operating segment increased by $3.6 million in the twenty-six weeks ended June 25, 2022 to $84.3 million as compared to $80.7 million in the twenty-six weeks ended June 26, 2021. The increase was primarily driven by $14.7 million in price increases partially offset by decreased volume driven by lower demand.

Income from Operations

Income from operations of our Canada operating segment increased by approximately $7.6 million in the twenty-six weeks ended June 25, 2022 to $10.2 million as compared to $2.5 million in the twenty-six weeks ended June 26, 2021. The increased sales along with improved product margins led to the increase in operating income.

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure and is the primary basis used to measure the operational strength and performance of our businesses as well as to assist in the evaluation of underlying trends in our businesses. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of our businesses and from intangible assets recognized in business combinations. It is also unaffected by our capital and tax structures, as our management excludes these results when evaluating our operating performance. Our management and Board of Directors use this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. Additionally, we believe that Adjusted EBITDA is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure of Adjusted EBITDA may not be directly comparable to similar measures used by other companies.
The following table presents a reconciliation of Net (loss) income, the most directly comparable financial measures under GAAP, to Adjusted EBITDA for the periods presented:
Page 36 



Thirteen Weeks Ended
June 25, 2022		 Thirteen Weeks Ended
June 26, 2021		 Twenty-six Weeks Ended
June 25, 2022		 Twenty-six Weeks Ended
June 26, 2021
Net (loss) income $ 8,816  $ (3,385) $ 6,929  $ (12,355)
Income tax provision (benefit) 6,424  1,428  5,532  (5,225)
Interest expense, net 12,533  19,159  24,161  38,178 
Interest expense on junior subordinated debentures —  3,152  —  6,304 
Investment income on trust common securities —  (94) —  (189)
Depreciation 14,172  15,270  27,426  31,611 
Amortization 15,566  15,414  31,087  30,323 
Mark-to-market adjustment of interest rate swap —  (751) —  (1,424)
EBITDA $ 57,511  $ 50,193  $ 95,135  $ 87,223 
Stock compensation expense 2,286  1,796  8,304  3,537 
Management fees —  88  —  214 
Restructuring (1)
513  —  565  109 
Litigation expense (2)
2,703  6,322  3,713  10,282 
Acquisition and integration expense (3)
1,438  3,299  2,215  8,139 
Change in fair value of contingent consideration (2,175) (1,212) (3,645) (1,212)
Buy-back expense (4)
—  1,350  —  1,350 
Anti-dumping duties (5)
—  2,636  —  2,636 
Adjusted EBITDA $ 62,276  $ 64,472  $ 106,287  $ 112,278 

(1)Restructuring includes severance, consulting, and other costs associated with streamlining our operations.
(2)Litigation expense includes legal fees associated with our litigation with KeyMe, Inc. and Hy-Ko Products Company LLC. (see Note 7 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements for additional information).
(3)Acquisition and integration expense includes professional fees, non-recurring bonuses, and other costs related to the merger with Landcadia III (see Note 3 - Merger Agreement of the Notes to Condensed Consolidated Financial Statements for additional information) and the secondary offering of shares in the second quarter of 2022.
(4)Infrequent buy backs associated with new business wins.
(5)Anti-dumping duties assessed related to the nail business for prior year purchases.


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

Page 37 

Thirteen weeks ended June 25, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated
Operating income (loss) $ 10,538  $ 10,437  $ 6,798  $ 27,773 
Depreciation and amortization 17,662  10,916  1,160  29,738 
Stock compensation expense 1,374  220  692  2,286 
Restructuring 478  35  —  513 
Litigation expense —  2,703  —  2,703 
Acquisition and integration expense 1,240  198  —  1,438 
Change in fair value of contingent consideration —  (2,175) —  (2,175)
Adjusted EBITDA $ 31,292  $ 22,334  $ 8,650  $ 62,276 


Thirteen weeks ended June 26, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated
Operating income (loss) $ 9,995  $ 6,546  $ 2,968  $ 19,509 
Depreciation and amortization 17,397  11,593  1,694  30,684 
Stock compensation expense 1,552  244  —  1,796 
Management fees 76  12  88 
Litigation expense —  6,322  —  6,322 
Acquisition and integration expense 3,108  191  —  3,299 
Change in fair value of contingent consideration —  (1,212) —  (1,212)
Buy-back expense 1,350  —  —  1,350 
Anti-dumping duties 2,636  —  —  2,636 
Adjusted EBITDA 36,114  23,696  4,662  64,472 

Twenty-six weeks ended June 25, 2022 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated
Operating income (loss) $ 8,142  $ 18,292  $ 10,188  $ 36,622 
Depreciation and amortization 34,719  21,470  2,324  58,513 
Stock compensation expense 6,562  1,050  692  8,304 
Restructuring 525  40  —  565 
Litigation expense —  3,713  —  3,713 
Acquisition and integration expense 1,927  288  —  2,215 
Change in fair value of contingent consideration —  (3,645) —  (3,645)
Adjusted EBITDA $ 51,875  $ 41,208  $ 13,204  $ 106,287 
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Twenty-six weeks ended June 26, 2021 Hardware and Protective Solutions Robotics and Digital Solutions Canada Consolidated
Operating income (loss) $ 16,045  $ 6,700  $ 2,544  $ 25,289 
Depreciation and amortization 34,520  23,974  3,440  61,934 
Stock compensation expense 3,056  481  —  3,537 
Management fees 185  29  —  214 
Restructuring 64  10  35  109 
Litigation expense —  10,282  —  10,282 
Acquisition and integration expense 7,290  849  —  8,139 
Change in fair value of contingent consideration —  (1,212) —  (1,212)
Buy-back expense 1,350  —  —  1,350 
Anti-dumping duties 2,636  —  —  2,636 
Adjusted EBITDA $ 65,146  $ 41,113  $ 6,019  $ 112,278 


Income Taxes

For the thirteen weeks ended June 25, 2022, the Company recorded an income tax provision of $6.4 million based on a pre-tax income of $15.2 million. The Company recorded an income tax provision for the twenty-six weeks ended June 25, 2022 of $5.5 million. The effective income tax rate was 42.2% and 44.4% for the thirteen and twenty-six weeks ended June 25, 2022, respectively.

The effective rate differed from the federal statutory rate due to an estimated increase in GILTI from the Company's Canadian operations, non-deductible stock compensation, and state and foreign income taxes.

For the thirteen weeks ended June 26, 2021, the Company recorded an income tax provision of $1.4 million based on a pre-tax loss of $2.0 million. The Company recorded an income tax benefit for the twenty-six weeks ended June 26, 2021 of $5.2 million based on a pre-tax loss of $17.6 million. The effective income tax rate was (73.0)% and 29.7% for the thirteen and twenty-six weeks ended June 26, 2021, respectively.

The effective income tax rate differed from the federal statutory tax rate in the thirteen and twenty-six weeks ended June 26, 2021 primarily due to certain non-deductible expenses, an estimated increase in GILTI from the Company's Canadian operations, and state and foreign income taxes.


Liquidity and Capital Resources

The statements of cash flows reflect the changes in cash and cash equivalents for the twenty-six weeks ended June 25, 2022 and the twenty-six weeks ended June 26, 2021 by classifying transactions into three major categories: operating, investing, and financing activities.

Net cash provided by operating activities for the twenty-six weeks ended June 25, 2022 was $14.7 million as compared to $59.8 million of cash used by operating activities in the comparable prior year period. Operating cash flows for the twenty-six weeks ended June 25, 2022 were unfavorably impacted by (1) increased inventory for the spring and summer busy season and new business wins, and (2) an increase in accounts receivable due to higher sales. Operating cash flows for the twenty-six weeks ended June 26, 2021 were unfavorably impacted by increased inventory for the spring and summer busy season and new business wins.
Page 39 

Net cash used for investing activities was $31.4 million and $61.8 million for the twenty-six weeks ended June 25, 2022 and the twenty-six weeks ended June 26, 2021, respectively. During the twenty-six weeks ended June 25, 2022, we acquired Monkey Hook for approximately $2.5 million, plus an additional $0.3 million holdback amount that remains payable to the seller, during the twenty-six weeks ended June 26, 2021, we acquired Oz Post International, LLC ("OZCO") for approximately $39.8 million (see Note 5 - Acquisitions of the Notes to Condensed Consolidated Financial Statements for additional information). Excluding acquisitions, the primary use of cash in both periods was our investment in new key duplicating kiosks and machines.

Net cash provided by financing activities was $19.4 million for the twenty-six weeks ended June 25, 2022. Our revolver draws, net of repayments, provided cash of $24.0 million in the twenty-six weeks ended June 25, 2022. Additionally, we used cash to pay $4.3 million in principal payments on the senior term loan under the Senior Facilities. Finally, in the twenty-six weeks ended June 25, 2022, the Company received $1.1 million from the exercise of stock options.

Net cash provided by financing activities was $116.0 million for the twenty-six weeks ended June 26, 2021. Our revolver draws, net of repayments, provided cash of $86.0 million in the twenty-six weeks ended June 26, 2021. In the second quarter of 2021, we entered into an amendment ("OZCO Amendment") to the term loan credit agreement dated May 31, 2018, which provided $35.0 million of incremental term loan funds to be used to finance the acquisition (see Note 5 - Acquisitions of the Notes to Condensed Consolidated Financial Statements for additional information). Additionally, we used cash to pay $5.3 million in principal payments on the senior term loan under the Senior Facilities. Finally, in the twenty-six weeks ended June 26, 2021, the Company received $1.8 million from the exercise of stock options.

We believe that projected cash flows from operations and ABL Revolver availability will be sufficient to fund working capital and capital expenditure needs for the next 12 months. As of June 25, 2022, the ABL Revolver had an outstanding amount of $117.0 million and outstanding letters of credit of $32.8 million leaving $100.2 million of available borrowings as a source of liquidity. Our material cash requirements for known contractual obligations include capital expenditures, debt, and lease obligations, each of which are discussed in more detail earlier in this section and in the Notes to the Condensed Consolidated Financial Statements. We believe projected cash flows from operations and ABL Revolver availability will be sufficient to meet our liquidity and capital needs for these items in the short-term and also in the long-term beyond the next 12 months. We also have cash requirements for purchase orders and contracts for the purchase of inventory and other goods and services, which are based on current distribution needs and are fulfilled by our suppliers within the short term.

Our working capital (current assets minus current liabilities) position of $461.4 million as of June 25, 2022 represents an increase of $70.4 million from the December 25, 2021 level of $391.0 million. We expect to generate sufficient operating cash flows to meet our short-term liquidity needs, and we expect to maintain access to the capital markets, although there can be no assurance of our ability to do so. However, disruption and volatility in the global capital markets, could impact our capital resources and liquidity in the future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Critical Accounting Policies and Estimates
Significant accounting policies and estimates are summarized in the Notes to the Condensed Consolidated Financial Statements. Some accounting policies require management to exercise significant judgment in selecting the appropriate assumptions for calculating financial estimates. Such judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, known trends in our industry, terms of existing contracts, and other information from outside sources, as appropriate. Management believes that these estimates and assumptions are reasonable based on the facts and circumstances as of June 25, 2022, however, actual results may differ from these estimates under different assumptions and circumstances.
There have been no material changes to our critical accounting policies and estimates which are discussed in the “Critical Accounting Policies and Estimates” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the year ended December 25, 2021, as filed with the Securities and Exchange Commission on March 16, 2022.

Recent Accounting Pronouncements

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See “Note 4 - Recent Accounting Pronouncements” of the Notes to Condensed Consolidated Financial Statements.

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Exposure
We are exposed to the impact of interest rate changes as borrowings under the Senior Facilities bear interest at variable interest
rates. It is our policy to enter into interest rate swaps only to the extent considered necessary to meet our objectives.
Based on our exposure to variable rate borrowings at June 25, 2022, after consideration of our LIBOR floor rate and interest rate swap agreements, a one percent (1%) change in the weighted average interest rate for a period of one year would change the annual interest expense by approximately $5.4 million.

Foreign Currency Exchange
We are exposed to foreign exchange rate changes of the Canadian and Mexican currencies as they impact the $176.3 million tangible and intangible net asset value of our Canadian and Mexican subsidiaries as of June 25, 2022. The foreign subsidiaries' net tangible assets were $115.1 million and the net intangible assets were $61.2 million as of June 25, 2022.
We utilize foreign exchange forward contracts to manage the exposure to currency fluctuations in the Canadian dollar versus
the U.S. Dollar. See Note 15 - Derivatives and Hedging of the Condensed Notes to the accompanying Condensed Consolidated Financial Statements.

Commodity Price Risk

Our transportation costs are exposed to fluctuations in the price of fuel and some of our products contain commodity-priced materials. The Company regularly monitors commodity trends and works to mitigate any material exposure to commodity price risk by having alternative sourcing plans in place, limiting supplier concentrations, passing commodity-related inflation to customers, and continuing to scale its distribution networks.
Item 4.
Controls and Procedures
Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of June 25, 2022, in ensuring that material information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the twenty-six weeks ended June 25, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II
OTHER INFORMATION
Item 1. – Legal Proceedings.
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We are subject to various claims and litigation that arise in the normal course of business. For a description of our material legal proceedings, see Note 7 - Commitments and Contingencies, to the accompanying Condensed Consolidated Financial Statements included in this Form 10-Q.
Item 1A – Risk Factors.
There have been no material changes to the risks from those disclosed in the Form 10-K filed on March 16, 2022 with the Securities and Exchange Commission (“SEC”).

Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds.
Not Applicable.
Item 3. – Defaults Upon Senior Securities.
Not Applicable.
Item 4. – Mine Safety Disclosures.
Not Applicable.
Item 5. – Other Information.

Entry into a Material Definitive Agreement

On July 29, 2022, the Company’s wholly‑owned subsidiaries, The Hillman Companies, Inc., (“Holdings”), The Hillman Group, Inc. (the “U.S. Borrower”) and The Hillman Group Canada ULC, (the “Canadian Borrower”), entered into Amendment No. 3 to the existing asset-based revolving credit agreement (the “Third ABL Amendment”) with Barclays Bank PLC, as administrative agent, and the lenders and other parties thereto to increase the aggregate commitments to $375.0 million, extend the maturity, convert the interest rate of the revolving loans and commitments to SOFR-based pricing, and make certain other changes to the existing asset-based revolving credit agreement.

The Third ABL Amendment amends and restates the ABL Credit Agreement, dated as of May 31, 2018 (as amended by Amendment No. 1, dated as of November 15, 2019, and as amended and restated by Amendment No. 2, dated as of July 14, 2021, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing ABL Credit Agreement”), by and among the U.S. Borrower, Canadian Borrower (the “Borrowers”, and each, a “Borrower”), Holdings, the lenders and issuing banks from time to time party thereto and Barclays Bank PLC, as administrative agent (the Existing ABL Credit Agreement, as amended and restated pursuant to the Third ABL Amendment, is referred to as the “Amended and Restated ABL Credit Agreement”).

The Amended and Restated ABL Credit Agreement contains usual and customary representations and warranties, covenants and events of default customary for facilities of this type. $325.0 million of the revolving credit facilities under the Amended and Restated ABL Credit Agreement is available to the U.S. Borrower and $50.0 million of the revolving credit facilities under the Amended and Restated ABL Credit Agreement is available to the Canadian Borrower, in each case, subject to a borrowing base.

Pricing for revolving credit loans under the Amended and Restated ABL Credit Agreement are, at the Borrower’s option, either adjusted SOFR (or a Canadian banker’s acceptance rate 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.

The stated maturity date of the revolving credit commitments under the Amended and Restated ABL Credit Agreement is July 29, 2027. The loans and other amounts outstanding under the Amended and Restated ABL Credit Agreement and related documents are guaranteed by Holdings 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 has guaranteed by the Canadian portion under the Amended and Restated ABL Credit Agreement.

The foregoing descriptions of the Third ABL Amendment and the Amended and Restated ABL Credit Agreement do not purport to be complete and is qualified in its entirety by the terms and conditions of the Third ABL Amendment and the
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Amended and Restated ABL Credit Agreement. Copies of the Third ABL Amendment and Amended and Restated ABL Credit Agreement are attached hereto as Exhibit 10.1 and Exhibit 10.2 and are incorporated herein by reference.

Item 6. – Exhibits.
a) Exhibits, including those incorporated by reference.
10.1 *
10.2 *
31.1 *
31.2 *
32.1 *
32.2 *
101 The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 25, 2022 filed with the Securities and Exchange Commission on August 3, 2022, formatted in eXtensible Business Reporting Language: (i) Condensed Consolidated Balance Sheets as of June 25, 2022 and December 25, 2021, (ii) Condensed Consolidated Statements of Comprehensive Income (Loss) for the thirteen and twenty-six weeks ended June 25, 2022 and the thirteen and twenty-six weeks ended June 26, 2021, (iii) Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended June 25, 2022 and the twenty-six weeks ended June 26, 2021, (iv) Condensed Consolidated Statements of Stockholders' Equity for the thirteen and twenty-six weeks ended June 25, 2022 and the thirteen and twenty-six weeks ended June 26, 2021, and (v) Notes to Condensed Consolidated Financial Statements.
* Filed herewith.

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SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HILLMAN SOLUTIONS CORP.
 
/s/    Robert O. Kraft /s/    Anne S. McCalla
Robert O. Kraft Anne S. McCalla
Chief Financial Officer Controller
(Chief Accounting Officer)
DATE: August 3, 2022

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