William Carter

William Carter from Stifel questioned the assumptions behind the 2026 outlook, specifically if the 'new business wins' component assumes a return to historical levels. He also asked for clarity on the $150 million annualized tariff impact, questioning the level of visibility and potential fluidity in pricing.

Answer

CFO Robert Kraft clarified that the 2026 outlook assumes a flat market scenario for prudence, not as a formal guide, and that the company expects to achieve its typical 2-3% in new business wins. He confirmed the $150 million tariff figure is fluid and depends on volumes but stated Hillman is confident it has covered its net exposure and has worked effectively with customers on pricing.

Speaking for William Carter of Stifel, an analyst asked for clarification on the Q3 gross margin outlook, the nature of the new $30 million cost savings challenge, and whether extensive cost-cutting in the supply chain creates risk in meeting future demand.

Answer

An executive clarified that Q3 gross margin should see a slight year-over-year improvement. Regarding the supply chain, Executive Nate Baxter and Executive Mark Scheiwer assured that the transformation is focused on flexibility and technology, supported by a $25 million increase in CapEx, to prevent overcutting and ensure capacity. Executive James Hagedorn added that the new $30 million savings target is a company-wide initiative that will involve corporate functions, not just the supply chain.