Hillman Solutions Corp.

Previous wording

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 our and our customers’, suppliers’ and other business partners’ operations, financial condition and cash flows including spending on home renovation or construction projects, inflation, recessions, instability in the financial markets or credit markets; (2) increased supply chain costs, including raw materials, sourcing, transportation and energy; (3) the highly competitive nature of the markets that we serve; (4) the ability to continue to innovate with new products and services; (5) direct and indirect costs associated with the May 2023 ransomware attack, and our receipt of expected insurance receivables associated with that cyber security incident; (6) seasonality; (7) large customer concentration; (8) the ability to recruit and retain qualified employees; (9) the outcome of any legal proceedings that may be instituted against the Company; (10) adverse changes in currency exchange rates; 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 February 22, 2024. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward looking statements.

Current wording

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 our and our customers’, suppliers’ and other business partners’ 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 tariffs, raw materials, sourcing, transportation and energy; (3) the highly competitive nature of the markets that we serve; (4) the ability to continue to innovate with new products and services; (5) seasonality; (6) large customer concentration; (7) the 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; or (10) 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 February 20, 2025. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward looking statements.

Previous wording

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, Hillman Solutions Corp. and its wholly-owned subsidiaries (collectively, “Hillman Group”), which had net sales of $393.3 million in the thirteen weeks ended September 28, 2024 and $1,123.0 million in the thirty-nine weeks ended September 28, 2024. Hillman sells its products to hardware stores, home improvement centers, mass merchants, pet supply stores, and other retail outlets principally in the United States, Canada, and Mexico. Product lines include thousands of small hardware parts such as fasteners and related items; threaded rod and metal shapes; keys and accessories; builder's hardware; personal protective equipment, such as gloves and eyewear; and identification items, such as tags and letters, numbers, and signs. We support product sales with services that include design and installation

Current wording

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, Hillman Solutions Corp. and its wholly-owned subsidiaries (collectively, “Hillman Group”), which had net sales of $359.3 million in the thirteen weeks ended March 29, 2025. Hillman sells its products to hardware stores, home improvement centers, mass merchants, pet supply stores, and other retail outlets principally in the United States, Canada, and Mexico. Product lines include thousands of small hardware parts such as fasteners and related items; threaded rod and metal shapes; keys and accessories; builder's hardware; personal protective equipment, such as gloves and eyewear; rope and chain; 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.

Previous wording

On March 26, 2024, we entered into a Repricing Amendment (2024 Repricing Amendment) on our existing Senior Term Loan due July 14, 2028. The 2024 Repricing Amendment (i) reduces the interest rate per annum and (ii) implements a 1% prepayment premium for the existing Term Loan to apply to Repricing Transactions that occur within six months after the effective date of the 2024 Repricing Amendment. In connection with the closing of the 2024 Repricing Amendment, we expensed $3.0 million consisting of $1.6 million of existing fees written off and $1.5 million in new fees expensed. We capitalized an additional $33.0 thousand primarily for the payment of upfront lender fees (original issue discount).

Current wording

On January 14, 2025, the Company entered into a Repricing Amendment (2025 Repricing Amendment) on its existing Senior Term Loan due July 14, 2028. The 2025 Repricing Amendment (i) reduces the interest rate per annum applicable to the Term Loan outstanding from SOFR plus a margin varying from 2.25% to 2.50% to SOFR plus a margin of 2.00%, as well as a 1.00% margin for ABR Loans and (ii) implements a 1% prepayment premium for the existing Term Loan to apply to Repricing Transactions that occur within six months after the effective date of the 2025 Repricing Amendment. In connection with the closing of the 2025 Repricing Amendment, the Company expensed $0.9 million of new fees.

Previous wording

Our business is impacted by general economic conditions in the North American markets, particularly the U.S. and Canadian retail markets, including hardware stores, home improvement centers, mass merchants, and other retailers. Changes in current economic conditions, including inflationary pressures in the cost of inventory, transportation, and employee compensation, foreign currency volatility, housing market trends, and concerns of a potential recession, have impacted consumer discretionary income levels and spending. Consumer discretionary income levels and spending impact the purchasing trends of our products by our retail customers. Any adverse trends in discretionary income and consumer spending could have a material adverse effect on our business or operating results.

Current wording

Our business is impacted by general economic conditions in the North American markets, particularly the U.S. and Canadian retail markets, including hardware stores, home improvement centers, mass merchants, and other retailers. Changes in current economic conditions, including inflationary pressures in the cost of inventory, transportation, and employee compensation, foreign currency volatility, housing market trends, tariffs, and concerns of a potential recession, have impacted consumer discretionary income levels and spending. Consumer discretionary income levels and spending impact the purchasing trends of our products by our retail customers. Any adverse trends in discretionary income and consumer spending could have a material adverse effect on our business or operating results.

Previous wording

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, particularly those located in China and Taiwan, because we purchase a majority of our products for resale from multiple vendors located in these countries. 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 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 1.3% in the thirty-nine weeks ended September 28, 2024, increased by 2.9% in 2023, and increased by 8.3% during 2022. The U.S. dollar increased in value relative to the Taiwan dollar by approximately 3.0% in the thirty-nine weeks ended September 28, 2024, declined by 0.4% in 2023, and increased by 10.8% in 2022.

Current wording

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, particularly those located in China and Taiwan, because we purchase a majority of our products for resale from multiple vendors located in these countries. 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 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 0.5% in the thirteen weeks ended March 29, 2025, increased by 2.8% in 2024, and increased by 2.9% in 2023. The U.S. dollar increased in value relative to the Taiwan dollar by approximately 1.0% in the thirteen weeks ended March 29, 2025, increased by 7.1% in 2024, and declined by 0.4% in 2023.

Previous wording

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 increased in value relative to the Canadian dollar by approximately 2.1% in the thirty-nine weeks ended September 28, 2024, declined by 2.4% in 2023, and increased by 5.7% in 2022.

Current wording

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 0.8% in the thirteen weeks ended March 29, 2025, increased by 9.0% in 2024, and declined by 2.4% in 2023.

Previous wording

In addition, the negotiated purchase price of our products may be dependent upon market fluctuations in the cost of raw materials (i.e. 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 that could impact the cost of labor and materials 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. 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 implement or maintain price increases and seek price concessions, as appropriate, is dependent on competitive market conditions.

Current wording

purchase cost of our products may also be dependent upon inflation or deflation in the local economies of vendors that could impact the cost of labor and materials 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. 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 implement or maintain price increases and seek price concessions, as appropriate, is dependent on competitive market conditions.

Previous wording

We import 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 have increased our product costs and required us to increase prices on the affected products.

Current wording

We import products, which are subject to customs requirements and to tariffs and quotas set by governments, through mutual agreements and bilateral actions. The historical U.S. tariffs on steel and aluminum and other imported goods have increased our product costs and required us to increase prices on the affected products. Current uncertainties about increases in tariffs of imported products from countries may have an adverse effect on our results. (see Recent Developments - Tariff Environment of Item 2 - Management’s Discussion and Analysis above and Risk Factors of Part II - Other Information for additional information).

Previous wording

•Net sales for the thirteen weeks ended September 28, 2024 were $393.3 million compared to net sales of $398.9 million for the thirteen weeks ended September 30, 2023, a decrease of approximately $5.6 million or 1.4%.

Current wording

•Net sales for the thirteen weeks ended March 29, 2025 were $359.3 million compared to net sales of $350.3 million for the thirteen weeks ended March 30, 2024, an increase of approximately $9.0 million or 2.6%.

Previous wording

•Net income for the thirteen weeks ended September 28, 2024 was $7.4 million, or $0.04 per diluted share, compared to net income of $5.1 million, or $0.03 per diluted share for the thirteen weeks ended September 30, 2023.

Current wording

•Net loss for the thirteen weeks ended March 29, 2025 was $(0.3) million, or $(0.00) per diluted share, compared to net loss of $(1.5) million, or $(0.01) per diluted share for the thirteen weeks ended March 30, 2024.

Previous wording

•Adjusted EBITDA(1) totaled $72.6 million versus $66.8 million in the thirteen weeks ended September 28, 2024 and in the thirteen weeks ended September 30, 2023, respectively.

Current wording

•Adjusted EBITDA(1) totaled $54.5 million versus $52.3 million in the thirteen weeks ended March 29, 2025 and in the thirteen weeks ended March 30, 2024, respectively.

Previous wording

(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.

Current wording

(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 loss to Adjusted EBITDA.

Previous wording

The decrease in total net sales during the third quarter of 2024 was driven primarily driven by the factors described below:

Current wording

The increase in total net sales during the first quarter of 2025 was driven primarily driven by the factors described below:

Previous wording

Hardware and Protective Solutions' net sales increased by $0.3 million in the thirteen weeks ended September 28, 2024 due to the following:

Current wording

Hardware and Protective Solutions' net sales increased by $14.5 million in the thirteen weeks ended March 29, 2025 due to the following:

Previous wording

•Hardware net sales decreased by $3.7 million primarily due to decreased volume driven by market softness, partially offset by $10.3 million in additional sales related to the Koch acquisition.

Current wording

•Hardware net sales decreased by $8.4 million primarily due to decreased volume of $6.8 million driven by market softness and the remaining was driven by reduced price.

Previous wording

•Protective equipment net sales increased by $3.9 million primarily driven by $6.6 million in additional sales related to the Intex acquisition offset by $2.3 million in decreased volume.

Current wording

•Protective equipment net sales increased by $23.0 million primarily due to $16.1 million in sales related to the Intex acquisition and increased volume of $7.2 million.

Previous wording

Robotics and Digital Solutions net sales in the thirteen weeks ended September 28, 2024 decreased by $3.3 million primarily driven by decreased volume of key and engraving sales.

Current wording

Robotics and Digital Solutions' net sales in the thirteen weeks ended March 29, 2025 increased by $1.0 million primarily due to increased prices.

Previous wording

Canada net sales decreased by $2.6 million primarily due to price decreases of $1.6 million and an unfavorable impact of the exchange rate from Canadian dollars to U.S. dollars.

Current wording

Canada net sales decreased by $6.5 million primarily due to reduced volume of $4.5 million driven by market softness and an unfavorable impact of the exchange rate from Canadian dollars to U.S. dollars.

Previous wording

•Warehouse expense decreased $0.5 million primarily due to lower sales volumes along with improved operational efficiencies.

Current wording

•Warehouse expense decreased $1.1 million primarily due to lower sales volumes along with improved operational efficiencies.

Previous wording

•Selling expense increased $0.7 million primarily due to increased variable selling expenses due to the shift from full-service keys to self-service keys, which have a higher variable selling cost.

Current wording

•Selling expense increased $2.5 million primarily due to increased variable selling expenses due to the shift from full-service keys to self-service keys, which have a higher variable selling cost.

Previous wording

•Selling expense increased by $0.5 million primarily due to increased variable compensation expenses.

Current wording

•Selling expense decreased by $0.5 million primarily due to reduced variable compensation expenses.

Previous wording

Depreciation expense increased $5.6 million due to capital spend on merchandising racks.

Current wording

Depreciation expense increased $3.1 million due to capital spend on merchandising racks.

Previous wording

In the thirteen weeks ended September 28, 2024, other income (expense) consisted primarily of a $0.5 million gain on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob (see Note 15 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information). In addition, we recorded income related to certain rebates received of $0.3 million along with exchange rate gains of $0.1 million in the thirteen weeks ended September 28, 2024.

Current wording

In the thirteen weeks ended March 29, 2025, other income (expense) consisted primarily of a $0.3 million gain on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob (see Note 15 - Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements for additional information). In addition, we recorded income related to certain rebates received of $0.2 million along with exchange rate losses of $0.1 million in the thirteen weeks ended March 29, 2025.

Previous wording

In the thirty-nine weeks ended September 30, 2023, other income (expense) consisted primarily of a $2.6 million loss on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob. We also received $0.6 million in benefits from the state and local governments associated with our new facilities in the thirty-nine weeks ended September 30, 2023. In addition, we recorded exchange rate gains of $0.4 million in the thirty-nine weeks ended September 30, 2023.

Current wording

In the thirteen weeks ended March 30, 2024, other income (expense) consisted primarily of a $0.3 million loss on the revaluation of the contingent consideration associated with the acquisition of Resharp and Instafob. We also recorded exchange rate gains of $0.2 million in the thirteen weeks ended March 30, 2024.

Previous wording

Income from operations in our Hardware and Protective Solutions segment increased $27.4 million due to the changes in net sales, cost of sales, and SG&A expenses described above.

Current wording

Income from operations in our Hardware and Protective Solutions segment increased $1.8 million due to the changes in net sales, cost of sales, and SG&A expenses described above in addition to an increase in depreciation expense of $1.7 million due to capital spend on merchandising racks.

Previous wording

Income from operations in our Robotics and Digital Solutions segment decreased $5.4 million. The $5.4 million decrease is primarily due to the changes in net sales, cost of sales, and SG&A expenses described above, in addition to an increase in depreciation expense of $1.8 million due to capital spend on engraving and key duplication kiosks and machines and a decrease of $1.1 million in other income driven by the changes in revaluation of the contingent consideration described above.

Current wording

Income from operations in our Robotics and Digital Solutions segment decreased $2.3 million. The $2.3 million decrease is primarily due to the changes in net sales, cost of sales, and SG&A expenses described above, in addition to an increase in depreciation expense of $1.5 million due to capital spend on key duplication kiosks and machines and an increase of $0.7 million in other income driven by the changes in revaluation of the contingent consideration described above.

Previous wording

Canada's income from operations decreased by $1.1 million primarily due to the changes in net sales, cost of sales and SG&A expenses described above. In the thirteen weeks ended September 28, 2024, Canada recorded exchange rate gains of $0.2 million and in the thirteen weeks ended September 30, 2023, Canada recorded exchange rate gains of $0.1 million.

Current wording

Canada's income from operations decreased by $0.8 million primarily due to the changes in net sales, cost of sales and SG&A expenses described above. In the thirteen weeks ended March 29, 2025, Canada recorded exchange rate losses of $0.2 million and in the thirteen weeks ended March 30, 2024, Canada recorded exchange rate gains of $0.1 million.

Previous wording

Interest expense, net, decreased $1.6 million in the thirteen weeks ended September 28, 2024, primarily due to a reduction in outstanding debt and a reduction in interest rate spreads driven by the debt repricing in the first quarter of 2024 (see Note 9 - Long-term Debt of the Notes to Condensed Consolidated Financial Statements for additional information).

Current wording

Interest expense, net, decreased $0.8 million in the thirteen weeks ended March 29, 2025, primarily due to a reduction in outstanding debt and a reduction in interest rate spreads driven by the debt repricing in the first quarter of 2025 (see Note 9 - Long-term Debt of the Notes to Condensed Consolidated Financial Statements for additional information).

Previous wording

For the thirteen weeks ended September 28, 2024 and thirteen weeks ended September 30, 2023, the effective income tax rate was 37.0% and 71.9%, respectively. The Company recorded an income tax provision for the thirteen weeks ended September 28, 2024 of $4.4 million based on a pre-tax income of $11.8 million, and an income tax provision for the thirteen weeks ended September 30, 2023 of $13.0 million based on a pre-tax income of $18.0 million.

Current wording

For the thirteen weeks ended March 29, 2025 and thirteen weeks ended March 30, 2024, the effective income tax rate was 9.7% and 24.5%, respectively. The Company recorded an income tax benefit for the thirteen weeks ended March 29, 2025 of $34 thousand based on a pre-tax loss of $351 thousand, and an income tax benefit for the thirteen weeks ended March 30, 2024 of $0.5 million based on a pre-tax loss of $2.0 million.

Previous wording

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

Current wording

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

Previous wording

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 uses this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments as well as 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.

Current wording

combinations. It is also unaffected by our capital and tax structures, as our management excludes these results when evaluating our operating performance. Our management uses this financial measure to evaluate our consolidated operating performance and the operating performance of our operating segments as well as 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.

Previous wording

(3)Transaction and integration expense includes professional fees and other costs related to the Koch Industries, Inc. and Intex DIY, Inc acquisitions and the CCMP secondary offerings in 2023.

Current wording

(2)Transaction and integration expense includes professional fees and other costs related to the Koch Industries, Inc. and Intex DIY, Inc acquisitions.

Previous wording

(4)In the first quarter of 2024, we entered into a Repricing Amendment (2024 Repricing Amendment) on our existing Senior Term Loan due July 14, 2028 (see Note 9 - Long-term Debt of the Notes to Condensed Consolidated Financial Statements for additional information).

Current wording

(3)In the first quarters of 2025 and 2024, we entered into a Repricing Amendment (2025 Repricing Amendment and 2024 Repricing Amendment) on our existing Senior Term Loan due July 14, 2028 (see Note 9 - Long-term Debt of the Notes to Condensed Consolidated Financial Statements for additional information).

Previous wording

Our working capital position, which we define as current assets minus current liabilities, of $355.3 million as of September 28, 2024 represents an increase of $30.4 million from the December 30, 2023 level of $324.9 million. $19.6 million of the increase is related the acquisition of Koch Industries Inc that occurred in January 2024 and $21.5 million of the increase is related to the Intex DIY acquisition that occurred in August 2024. 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.

Current wording

Our working capital position, which we define as current assets minus current liabilities, of $347.0 million as of March 29, 2025 represents an increase of $27.5 million from the December 28, 2024 level of $319.5 million driven by seasonality of the business. 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 and economic uncertainties driven by increases in tariffs could impact our capital resources and liquidity in the future. We do expect the current tariff environment to increase our costs of products we import, which will increase our working capital position and unfavorably impact our future cash flows (see Recent Developments - Tariff Environment of Item 2 - Management’s Discussion and Analysis and Risk Factors of Part II - Other Information for additional information).

Previous wording

Net cash provided by operating activities for the thirty-nine weeks ended September 28, 2024 was unfavorably impacted by increases in accounts receivable due to the seasonality of our business as well as accounts receivable generated by the Koch business post acquisition. Additionally, we saw increased accounts payable due to the timing of inventory purchases and payments.

Current wording

Net cash used for operating activities for the thirteen weeks ended March 29, 2025 was unfavorably impacted by increases in accounts receivable due to the seasonality of our business in addition to a decrease in accrued incentive compensation related to the payout of 2024 incentive compensation.

Previous wording

Cash of $64.2 million and $52.1 million was used in the thirty-nine weeks ended September 28, 2024 and thirty-nine weeks ended September 30, 2023, respectively, to invest in new key duplicating and engraving kiosks and merchandising racks.

Current wording

Cash of $20.7 million and $17.8 million was used in the thirteen weeks ended March 29, 2025 and thirteen weeks ended March 30, 2024, respectively, to invest in new key duplicating and engraving kiosks and merchandising racks.

Previous wording

The Company used $4.3 million of cash for principal payments on the senior term loan. As of September 28, 2024, we have outstanding borrowings of $747.6 million on the term loan. In August 2023, the Company made a $80.0 million prepayment against the outstanding term loan balance without payment of a premium or penalty. See Note 9 - Long-term Debt of the Notes to Condensed Consolidated Financial Statements for additional information.

Current wording

The Company used $2.1 million of cash for principal payments on the senior term loan. As of March 29, 2025, we have outstanding borrowings of $643.3 million on the term loan. See Note 9 - Long-term Debt of the Notes to Condensed Consolidated Financial Statements for additional information.

Previous wording

In the thirty-nine weeks ended September 28, 2024 and thirty-nine weeks ended September 30, 2023 the Company received $8.9 million and $1.6 million from the exercise of stock options, respectfully.

Current wording

In the thirteen weeks ended March 29, 2025 and thirteen weeks ended March 30, 2024 the Company received $0.3 million and $5.9 million from the exercise of stock options, respectively.