Cincinnati-based hardware products distributor Hillman Solutions reported its 2025 first quarter financial results on April 29, showing a modest increase in sales and a reduction in net loss.

Net sales increased 2.6% year-over-year to $359.3 million, driven by its Hardware and Protective Solutions product category (5.6% increase) and followed by Robotics and Digital Solutions (1.9% increase). Hillman’s Canada unit’s sales decreased by 18.7%.

Net loss was $300,000 in 1Q25, compared to $1.5 million in the same quarter last year, and adjusted gross margin in the quarter (46.9%) was only slightly down compared from 47.6% in 1Q24.

Adjusted EBITDA increased to $54.5 million compared to $52.3 million, and EBITDA margins were up 0.3% to 15.2%, compared to Q1 2024.

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1Q25 Performance By Product Category

• Hardware & Protective sales of $270 million increased 5.6% year-over-year, driven by contributions from the acquisition of Intex DIY in August 2024 and new business. Adjusted EBITDA of $37.4 million on a 15.8% margin increased by 120 bps year-over-year.
• Robotics & Digital sales of $56.5 million grew 1.9% year-over-year, supported by the rollout of MinuteKey 3.5. Adjusted EBITDA of $15.4 million decreased by 340 bps year-over-year.
• Canada sales of $28.4 million decreased by 18.7% year-over-year, attributed to a soft market and economy and FX headwinds. Adjusted EBITDA of $1.7 million decreased by 260 bps YoY.

Hillman’s Focus Shifts to Supply Chain Diversification

Uncertainties around the timing and magnitude of tariffs colored some of the commentary from Hillman, including the company’s withdrawal of its free cash flow guidance.

During the April 29 earnings call, Hillman President and CEO Jon Michael Adinolfi estimated the impact of all new 2025 tariffs to be about $250 million on an annualized basis.

“We believe we can mitigate the additional tariff-related costs through price increases,” Adinolfi said. “At the same time, we are working with our customers and suppliers to optimize the country of origin were we source our products.” He later clarified that it would be price increases, rather than surcharges. He added: “We’re going to work with our customers to make sure we have the right cost position over the right time horizon.”

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Hillman officials said the company will continue to diversify the country of origin where its products are sourced to optimize its supply chain, saying the company has the ability to “reduce China exposure to approximately 20% by year-end.” During a Question and Answer session of the earnings call, Adinolfi said it would specifically eye other areas of Southeast Asia, including India, which it had persued before the tariffs announcements.

Currently, the company sources about one-third of its products from China, one-third from North America and one-third from the rest of the world.

Products still sourced from China include core fastening products, hardware products and dip-gloves, for example.

“Our current focus has shifted to working with our customers and suppliers to mitigate the impact from tariffs,” Adinolfi said in an earnings report. “Considering our long-term partnerships with our top customers and our plan to continue diversifying our supply chain, we believe we are well-positioned given the current markets.”

The company pointed to accelerating a “dual faucet” strategy of sourcing from multiple suppliers in multiple countries to increase its flexibility.

View Hillman’s 4Q24 earnings.