Hillman Solutions (HLMN) risk factors, FY2024 10-K

Risks Relating to Our Products and Demand for our Products

1. 018| December 28, 2024 Form 10-K
2. 02Our sales are dependent upon the health and stability of the general economy. Adverse changes in economic factors specific to the home improvement industry may adversely affect our sales and financial performance
3. 03Large customer concentration and the inability to penetrate new channels of distribution could adversely affect our business
4. 04To compete successfully, we must develop and commercialize a continuing stream of innovative new products that create consumer demand
5. 05Acquisitions have formed a significant part of our growth strategy in the past and may continue to do so. If we are unable to identify suitable acquisition candidates, successfully integrate an acquired business, or obtain financing needed to complete an acquisition, our growth strategy may not succeed
6. 069| December 28, 2024 Form 10-K

Risks Related to our Operations

1. 07Our results of operations could be negatively impacted by inflation or deflation in supply chain costs, including raw materials, sourcing, transportation and energy
2. 08Our business is subject to risks associated with sourcing product from overseas, including tariffs
3. 09We are subject to inventory management risks: insufficient inventory may result in increased costs, lost sales and lost customers, while excess inventory may increase our costs
4. 10Because our business is working capital intensive, we rely on our ability to manage our product purchasing and customer credit policies
5. 11We are subject to the risks of doing business internationally

Risks Related to our Workforce

1. 12Successful sales and marketing efforts depend on our ability to recruit and retain qualified employees
2. 13Increases in labor costs, potential labor disputes and work stoppages or an inability to hire skilled distribution, sales and other personnel could adversely affect our business

Risks Related to our Technology and Cybersecurity

1. 14Our success is highly dependent on information and our technology systems, as well as those of our third party vendors and business partners
2. 15Unauthorized disclosure of personal, sensitive or confidential customer, employee, supplier, or Company information, whether through a breach of our computer systems, or those of our third party vendors and business partners, including cyber-attacks or otherwise, could severely harm our business
3. 1612| December 28, 2024 Form 10-K

Risks Related to Intellectual Property

1. 17Failure to adequately protect intellectual property could adversely affect our business
2. 18Intellectual property rights are an important and integral component of our business. We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright, and trade secret laws, as well as licensing agreements and third-party nondisclosure and assignment agreements
3. 19Our success depends in part on our ability to operate without infringing on or misappropriating the proprietary rights of others, and if we are unable to do so we may be liable for damages
4. 2013| December 28, 2024 Form 10-K

Risks Relating to Our Indebtedness

1. 21We have significant indebtedness that could affect operations and financial condition and prevent us from successfully executing our strategy
2. 22Despite current indebtedness levels, we may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage
3. 23We rely on available borrowings under the Asset-Based Revolving credit facility (“ABL Revolver”) for cash to operate our business, and the availability of credit under the ABL Revolver may be subject to significant fluctuation
4. 24We are subject to fluctuations in interest rates
5. 2514| December 28, 2024 Form 10-K
6. 26The failure to meet certain financial covenants required by our credit agreements may materially and adversely affect assets, financial position, and cash flows
7. 27Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us
8. 28We are exposed to adverse changes in currency exchange rates
9. 2915| December 28, 2024 Form 10-K
10. 30We are subject to legal proceedings and legal compliance risks
11. 31Our business may be adversely affected by seasonality
12. 32Future tax law changes may materially increase our prospective income tax expense